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EDUCATION

HOW CAN I RAISE MY CREDIT SCORE?

Pay Your Bills on Time

 When lenders review your credit report and request a credit score for you, they're very interested in how reliably you pay your bills. That's because past payment performance is usually considered a good predictor of future performance.You can positively influence this credit scoring factor by paying all your bills on time as agreed every month. Paying late or settling an account for less than what you originally agreed to pay can negatively affect credit scores.

 

Don't Close Unused Credit Cards

Keeping unused credit cards open—as long as they're not costing you money in annual fees—is a smart strategy, because closing an account may increase your credit utilization ratio. Owing the same amount but having fewer open accounts may lower your credit scores.

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Open a Secured Credit Card

A secured credit card is a type of credit card where you make a deposit into a checking account that “secures” the line of credit the bank or lender is extending you. For example, you can open a checking account and put $200 in it and get a line of credit for $200 (though some secured options will give you a higher credit limit than your deposit).

You can get a secured card with bad credit and adding a new account with a positive payment history will go a long way in showing creditors you’re back on solid ground.

If you default on the payments on a secured credit card, then the deposit you made initially will be used to cover the balance on the card.