How to Improve Your Credit Score

16, Jan 2013 Posted by : Comments : Comments Off

It’s important to improve your credit score if you plan to do just about anything in life. This includes renting or buying a house, renting or buying a car, getting a loan, or even starting a business. These are things that a lot of us strive for and would like to achieve at some point, but it’s only possible with a strong credit score. So how do you obtain good credit and maintain that credit score so that you qualify for these things? It’s actually quite simple to improve your credit score. By following the tips below, you will significantly improve your credit and you’ll do it very quickly too.

Use your credit cards, but do so diligently

Credit cards can improve your credit score significantly, but they have to be used with caution. Credit card debt is a common problem today, and you wouldn’t want to fall victim to the demands of creditors. Instead, use your credit cards responsibly and do what you can to enhance your credit one purchase at a time. Try charging groceries, gas, and other small purchases to the card. At the end of the month, you should pay the debt off in full. This will grow your credit score at a faster rate and it will help you qualify for better financing and larger loans. If you want to buy a car or house, this is very important.

Finance a used car

Financing a used car is a great way to improve your credit score. I suggest a used vehicle, rather than a brand new vehicle, only because used vehicles make more economical sense. New cars are actually unwise to purchase because they retain their value very poorly. A new car will depreciate in value by thousands of dollars in just a few years. A used car will generally hold its value, or decrease in value very slowly. Financing is one of the better ways to improve a credit score. Financing a car generally involves a lot of money and unlike credit card usage, you will see more than just subtle changes in your credit score when you finance something.

Finance home purchases like appliances and furniture

Instead of paying in cash for appliances and furniture, why not finance and build your credit score while making payments? While you may lose a little bit of money on interest, financing small items for your home can help improve your credit score considerably. A new couch, fridge, or even a new television are excellent items to finance.

Buy a small home or condo and begin to pay a mortgage

If you have the money, purchasing a small home or condo is a smart investment and it can improve your credit score at a faster rate than any other method. Most mortgages are based off your present employment and credit history is not as important. Even if your credit score is lacking at the moment, purchasing a small home or condo could still be a possibility if you have a good job.

Take out a small loan and make on-time payments

Anytime that you are loaned money and you responsibly make payments to pay it off, your credit score is going to improve. Small loans are easy to manage, simple to get, and a great way to enhance your credit. The loan doesn’t have to be for much, a few thousand dollars should be enough to improve your credit score. Be sure to find a good use for the loan and spend the money wisely. Investing in stock, real estate, or something you have experience with is a smart decision when you’re taking out a loan merely to build your credit.

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