How To Improve Your Credit Score

There are several ways to improve your credit score. Most of them include a common sense approach to money management. If you are just starting out or you are trying to rebuild these tips will help you have a great credit score. We all know that having a great credit score is a good thing to have if you want to take out a loan for a car or house and get credit cards for life’s little emergencies.

Before we begin reviewing credit scores, there are a few basic things we need to review. In any loan, there are two parts of any payment: principle (the money they are loaning you) and interest (the fee they are charging you for the privilege of loaning you money). When you pay you are paying on both of these things. Depending on how the loan is amortized depends on where your money is going. For example, the most common loan amortization schedule is 30 years. Building, or rebuilding, a good credit history takes time and consistency.

Forget the minimum payment

Pay as much as you can afford to all your credit cards, loans, or anything else that you have financed. Paying only the minimum payment will get you nowhere, fast. Paying more will let you work on both the principle and the interest and work toward paying off the debt quickly.

Consolidate, Consolidate, and Consolidate

Like a corporation that consolidates to save money and employees, you should consolidate to save on interest fees. If you can combine a few credit cards together to save on interest, especially if there are low introductory rates. This is a great way to pay off your debt at much less cost to you and build up good payment history which weighs heavily in your overall score.

Pay Your Bills on Time

If you are able, always send everyone something including utilities because it all affects your overall credit score. By paying everyone something, you keep accounts open and prevent negative reports against your credit. Your score also improves when you pay your bills and when you do it on-time. This is true for both your credit cards and your utilities.


If you have had credit problems, the most important thing you can do is get rid of the old debt. Collections or charge-offs can drag your credit score down. Call those creditors and see what you can do to negotiate and see if you can pay the accounts off because it will help your score.

Plan Your spending

We all know that we need to spend money, but if you make a plan you can make wise choices about your money. Begin with calculating your income and debts. Then, take whatever is left over and use it for your monthly entertainment, clothing and food expenses. Also, don’t forget to save at least 10 percent of your income every month to keep yourself paid as well.

Insurance Score

An insurance score is similar to a credit score except that it is used only by insurance companies. This score is based on your credit history, and it is designed to determine how likely you are to file an insurance claim at some point in the life of your policy. Your insurance score is used by the company in order to determine how high your insurance premiums should be. If you have a high insurance score, your insurance premiums will be lower than if you had a low insurance score.

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