Credit SparkFinancial Tips for the Average Joe

By now, we all know that a good credit score chart is important not only for major life purchases but increasingly in other areas like seeking employment or purchasing insurance. While there are positives signs in the movement towards an improving global economy, times are still hard for many individuals and credit problems have plagued a large segment of the population.  If you have had difficulty meeting your bills, your credit rating has likely suffered. The good news on how to raise your credit score is that is it pretty simple, but bear in mind that although it is simple, it isn’t a quick process.

The first step is to start this new year with a promise to pay bills on time. Even if it is not possible to pay the full amount due on a credit card, talking to the issuer and fulfilling a pledge to send a monthly amount on time faithfully can go a long way in starting back on the journey to positive credit scores. Establishing consistent payments over a period of time is the key to improving your score.

Another tip on how to improve your credit is to keep balances low on any credit cards issued in your name. Not only does the number of cards in your name affect your score, so do the various balances.  It is possible to only have a card or two and have a lower number than someone else who has more cards simply because of high balances and bad on time payment history.

Those first starting out and trying to establish a credit history are well-advised not to open too many accounts too early on. Having a large number of open accounts has an impact on something called credit age. Simply put, credit age looks the amount of accounts, the amount of time they have been open, the balances of each and the payment history. Credit age means more in the overall scoring for those who do not have long term established credit.

Credit cards and loans that have installment payments like car loans are important for building a credit history, yet it is not wise to open up accounts willy-nilly because someone has said that this is how to improve your credit. Do open one or two card accounts, but only with the intention of responsible management and timely payment.

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