How to Build up a Good Credit Score Using What You Have

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Many people don’t give their credit score much thought until their credit application is denied due to their credit report. After obtaining a copy through one of the credit bureaus, they realize that a number of issues may have dragged their credit score down to a level that makes it hard to obtain a charge card or a loan. Fortunately, several simple steps make it easy to rebuild your credit score within a relatively short amount of time.

Pay Your Bills on Time

Missing scheduled payments can rapidly lower your credit score. Even being late can have a negative impact, depending on the creditor. To avoid credit problems as well as late fees or penalties, pay all your bills on time. If you must be late or miss payments due to unforeseen circumstances, contact the creditors and let them know. Often, a company will make a note that you called in to explain the situation and sometimes waive late fees or penalties. They also might not ping your credit rating.

Reduce Your Reliance on Credit

Many of us use credit to buy almost anything these days. Some people buy their groceries and pay their utility bills with a credit card. But the more often you charge a purchase, the easier it becomes, and you can quickly rack up unplanned purchases. Leave your credit cards home when you go shopping and pay with cash or a debit card instead. Or, if you must use credit, keep track of the amount spent, and pay it off when the monthly statement arrives.

Avoid New Debt and Credit Accounts

While paying down your current credit balances and switching to cash payments or reducing credit use, don’t take on new debt just yet. Avoid opening new credit cards unless you can get a lower interest rate or plan to consolidate your outstanding credit balances. Try to hold off applying for a loan until your debt load has been reduced, and your payments are more manageable.

Use Your Home’s Equity

If you own a home, talk to a financial lender about accrued property equity and a home equity line of credit. Similar to a credit card, a home equity loan is often available at a lower interest rate than your credit cards. However, your home is used as collateral if you become unable to pay off the outstanding credit balance. Your home equity credit line can also serve as a credit card to make new purchases at the reduced interest rate. This credit option may lower your monthly payments while you pay off other credit accounts.

Follow steps like these to reduce your dependence on credit purchases and to improve your credit score overall.


Lizzie Weakley is a freelance writer from Columbus, Ohio. In her free time, she enjoys the outdoors and walks in the park with her three-year-old husky, Snowball.


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