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Beef Up Your Credit Score

Are you worried about your credit score? Don't worry… you are not alone. As adults, few things can impact our lives to the extent that a poor credit score can. Lower scores affect your ability to get a loan, the terms you are able to get for loans, and in some cases even cost you getting a new job.

It is crucial that we keep a good credit score, but unfortunately credit scores are very easy to ruin, and very difficult to improve.

Let's take a look at a few ways you can get a nice boost to your credit score.

1. Check for errors: This is probably the easiest thing you can do to help your credit score. Not every report has errors, but most people do not even take the time to review their reports to make sure theirs are correct. It is very easy to obtain a free copy of your credit report, and it is something everyone should do at least one time a year. If you do find an error, report it immediately, and you could find a nice jump in your credit score in just a couple months.

2. Pay down your credit cards: This tip is not so easy to do. If you have a lot of debt, it can take a while to get your debt lowered, but you have to try to put as much as possible towards your outstanding debts as possible. The best debt to attack first is your credit card debt. Lenders like seeing low installment loans, but its revolving credit such as credit cards that they pay the most attention to. A good rule of thumb is to get your balances below 30% of your total available credit, but obviously the lower the better.

3. If you don’t have a credit card, get one: While credit cards can be a dangerous temptation, they are crucial to establishing a good credit rating. This is more for people with limited to no credit history. It is not always so easy to get your first credit card. In years past you would get bombarded with offers as soon as you hit 18, but lenders have tightened up standards, and made it much more difficult to get a card for people with no credit history. A good way around this obstacle would be to get a secured credit card. In this case, you put up a few hundred dollars, and get your card with that same available balance. Two things to remember here: first make sure you pay your purchases in full each month, and secondly make sure that the lender reports your account activity to each of the 3 major credit bureaus. In some cases the card will switch over to a traditional credit card after a certain time period, but not always. This does not matter that much because it will build your credit score and give you the opportunity to acquire a real credit card in the not-too-distant future.

Michael Fowlkes

Michael Fowlkes is a financial writer who has been with the Fresh Brewed Media family since 2004. Over the course of his tenure with Fresh Brewed Media, he has worn many hats, including portfolio manager, options analyst, and writer. Michael received his undergraduate degree from Virginia Tech in Accounting and got his start in finance working as a stock trader for six years at Chase Investment Counsel in Charlottesville, Va.