Your credit score is becoming increasingly more important to your everyday life. Not only do banks use it
to qualify you for credit cards and loans, insurance companies use it to price your monthly premiums, and
even employers use it to decide whether to hire you. These days, it’s hard to get by with a low credit
score. It has too much impact on your life.

If you want to improve your credit score, you should first know the things that influence your score.

1.        The timeliness of your bill payments is 35% of your credit score.

2.        The amount of debt you have is 30%.

3.        The length of time you’ve had credit is 15%.

4.        The number of recent applications is 10%.

5.        The mix of credit (credit cards vs. loans) is 10%.

Generally, you can build a good credit score by paying your bills on time, keeping your credit card
balances low, having a longer credit history, keeping your credit applications to a minimum, and having
experience with both revolving and non-revolving credit.

Your credit score is directly influenced by the information on your credit report.
If you want to know what’s hurting your credit, you should order your credit score
or credit report or both. Your credit score generally comes with an analysis of
the things that are influencing your credit score. You can get a free credit report
by visiting the only government-approved free credit report site online,
www.annualcreditreport.com. With your credit report in hand, you can
reference the accounts that are hurting your score and begin figuring out what
you need to do to improve your credit score.

Get Caught Up on Past Due Bills

Since payment history has the most significant impact on your credit score, late
payments will hurt your credit score more than anything. This includes
delinquent, charged-off, and collection accounts along with unpaid tax liens and
judgments. If you have accounts that are past due, pay them to bring them
current again. As long as the negative information about these accounts
remains on your credit report, they will impact your credit score.

Reduce Your Credit Card Balances

Your credit utilization is the ratio of your credit card balances to their credit
limits. The higher your balances compared to your credit limit, the higher your
credit utilization and the lower your credit score will be. Work on paying
balances to at least 30% of their credit limits.

Get Some Positive Payment History

To improve your credit score, your recent credit history needs to be more
positive than negative. Use your credit cards periodically, but make sure you
pay the balance in full before the due date each month. If you have trouble
getting a credit card, consider a secured credit card, which requires you to
secure the credit limit with a deposit. Other than the deposit, secured credit
cards work like traditional credit cards and are usually included in your credit report.

Get Rid of Credit Report Errors

When you check your credit report, make sure the information included in it is accurate. Otherwise,
inaccurate, negative information could pull down your credit score. When you find an error, you can
dispute it with the credit bureau that provided your credit report to repair credit.. Put your dispute in
writing and provide copies of any proof you have supporting your claim. The credit bureau will conduct an
investigation and if the dispute returns in your favor, the disputed information will be removed from your
credit report.

Be Careful About Canceling Credit Cards

You might be tempted to get rid of unused credit cards, but doing so could hurt your credit score. If the
credit card is your oldest account or it still has a balance, leave it open to protect your credit score.
Credit card issuers often close inactive credit card accounts, so use your cards from time to time so
they'll remain open and continue to work in your favor.

This article was submitted by Robert Valentine of Financial and Retirement Management.Robert Valentine is a well-known expert in the matters concerning investors. His articles on financial planning matters that concern investors have been published by several publications throughout the United States.