There are many things in your life that reflect on your credit score. Many banks determine whether or not to lend money depending on your credit score. If you happen to have a poor credit rating this will affect your day to day life. But there are ways to improve your credit score and improve your life.

How you handle your credit cards provides a great deal of information to banks. Do you handle your card wisely? Do you keep near the upper limit of your card credit? Do you pay only the minimum monthly payment?

One of the best things you can do is stay within your limits and pay off as much credit card debt as you can. Banks like a person who pays off credit card debt before other debt is paid off. That means it is important to pay off all debt, but if you have a choice of whether to pay off mortgage, car loan or other debt before credit card debt, pay off the card or cards.

Lenders appreciate a big gap between the amount of credit you use and the available credit limits. Keeping your balances below 30% of the credit limit on each card is one of the smartest things you can do.

Find out your credit card balance and your credit score. These numbers are kept in separate places. Go to the trouble of finding out. Request a copy of your credit score report from the well known lending companies such as Trans Union Credit and Equifax. You are entitled to one free report each year from each of the credit reporting agencies.

You’d be amazed how often there are mistakes. And guess what: most of the mistakes are not in favor of the card holder. To keep mistakes at a minimum be sure to request copies of your report every year. If you find something that is not accurate be sure to let the credit bureau know about it and make sure it is corrected.

You probably have an old credit card account you haven’t used in a long time. Maybe you have forgotten about this account. To make sure this kind of situation doesn’t come back and bite you, either use the account or dump it.

As far as banks and credit reporting agencies are concerned, if you have an account they assume you will use it and use it to the maximum. If you need the credit and keep the card, use the oldest cards every few months and charge a small amount. Pay off in full when the monthly statement arrives.

Try to get “good will.” Good will means you are appreciated as a customer by a merchant. If you’ve been a good customer and paid 98% of your bills on time, the merchant just might forgive your small mistakes. Ask the merchant if he will do this. If he is willing, have him send a letter to credit reporting agencies. In this way, try to erase your forgiven mistakes.

Don’t ask the credit card company to lower your credit limit on a card you have an outstanding balance on. If the percentage of your debt exceeds 30% of the credit balance you will be hurting yourself. Keep your debt below 30% of the credit limit.

Bankruptcy makes your credit score terrible, as you probably know. If your personal economy is really bad and getting worse, talk with a professional. Many creditors accept deals if they are approached properly, in time and responsibly.

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Tags: credit score, handle your card, minimum monthly payment