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How To Improve Credit Score - PDF

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					            How To Improve Credit Score




These days most of us avail loans to buy a house, set up a business, or buy a
car. Many students take loans to further their education. How soon the loan is
sanctioned, the rate of interest, and the amount sanctioned will all depend on
your credit score which is based on your credit report. People with scores of
700 and more are the beneficiaries of lower interest rates and quick
sanctions. Imagine if your score is greater than 700 and another person has
a score of 698 then the person with score 698 will have to pay interest that is
higher by one-half percentage point. And, this means over a year a person
with a lower score will pay USD 19,000 and more as interest on a loan of say
USD 165,000.

A credit score takes into consideration: payment history, current earnings,
current debt, length of credit history, types of credit utilized, and your new
credit. If two or more members of your family are earning then apply for a
loan jointly.

You can take a few simple steps and ensure that your credit score is higher
than 700.

•     Maintain a long healthy credit history. Keep alive your oldest credit card
and be sure to pay all bills in time. Never keep bills pending over a 30 day
period. If in a crunch at least pay the minimum charges due.

•     Do not have too many credit cards. Learn to say “NO,” to offers of free
credit cards. And, maintain a good credit limit. Avoid using all the available
credit on the cards.

•     Ensure that the credit report you have is accurate and that there are no
errors clerical or otherwise.

•     Plan your finance such that it is healthy. Consider debt consolidation.

•     Never suddenly close or open accounts. This leads to suspicion that you
are trying to manipulate your credit report.

•     If you are having problems speak to your creditors well in advance and
work out a stage wise repayment. Request the creditor to refrain from
reporting the late payment.

•    Late or delayed payments drive your score down so always pay bills
dead on time. Keep a tab on due dates and ensure that all bills are paid.



Learn all you can about credit reports and scores and keep the criteria in
mind while managing your finances. Maintain the debt-to-credit limit ratio
and, if need be take the help of a finance planner. A useful source to learn
about managing credit is: http://www.balancepro.net/services/index.html
they provide in depth coverage on money management, debt management,
and credit report review.

Even if advised refrain from filing for bankruptcy. All you need to do is to sit
down and curtail expenses, plan you income-expenditure , and avoid
spending what you have not earned.