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6 Secrets to Better Credit

Good credit is necessary to get approval for a mortgage or other loan. The ability to borrow money is not the only thing that can be hampered by bad credit. More and more landlords and property management companies are checking the credit of prospective renters to judge if they are reliable. These 6 secrets to better credit can help consumers improve their credit scores so that their credit will help them achieve their goals rather than be an obstacle to overcome.

Paying bills on time is the most important activity to help increase a person's credit score. Most people know that being late with payments will damage their credit. However, these secrets to better credit may surprise you.

1. Do not open too many accounts at one time.

Many people do not realize that the timing of payments on accounts is not the only factor that affects the appearance of a person's credit. Another factor that affects credit decisions is the average age of accounts. If the person suddenly opens numerous new accounts such as credit cards, the average age of accounts can drop significantly. This can appear as a warning to new lenders. This is especially important for people who are rather new to building credit for the first time compared to those who have established credit.

2. Check the credit report by ordering the report directly from the credit reporting agency.

Consumers can order a copy of their credit reports from the credit reporting bureaus. Periodically checking credit reports can help guard against inaccuracies and identity theft. If there is something on the report that is inaccurate, the consumer can challenge this inaccuracy through the credit reporting bureau. If people have questions about an entry on the report, they can contact the company directly.

3. Fixing a credit score does not occur immediately.

Even if consumers pay off all their delinquent accounts as they appear on the report, the credit report is not immediately expunged. Accounts appear on credit reports for seven years. Therefore, it takes time to improve a score. Adopting a practice of clearing delinquent accounts and paying bills on time will gradually improve the credit score.

4. If the credit score has been damaged and the consumer is struggling to make payments on time, the person should consider seeking help from a credit counseling agency.

Legitimate credit counseling agencies assist people in setting up repayment plans with creditors and assist in raising credit scores though responsible payment practices. The credit agency works with creditors to lower the amount of payment that is due. Sometimes, they are successful in getting creditors to lower the fees or interest to make it easier for the consumer to fix their credit.

5. Do not apply for more than two credit cards at any given period.

If the credit reporting bureaus see that consumers have applied for three or more credit cards, they believe that either the person is desperate for cash or that their identity has been stolen. Each scenario has a negative effect on the person's credit score.

6. Lower the amount owed to creditors.

When judging a person's credit, the lender or landlord may consider the person's total amount that is owed to creditors. If the person's income is too low to cover the amount owed, chances are that they will not feel confident about the person's ability to pay on time.

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