Let’s get right to it shall we?
1) Beware Of Debts & Credit You Don’t Use
Just as it is very easy to apply for a store credit card, it is also easy to forget you have it. It is important to remember that the account will stay on your report and damage or not your score as long as it is open. Avoid having credit lines and cards you won’t use. It will make you look more risky from a lenders point of view. Stick only with the accounts you use on a daily basis and consider closing your other accounts. This way it will make it easier for you to follow your debts and will increase the chances of you having a good credit score. It is also important to know that when you close an account, the record of the closed account remains on your credit report and can affect your credit score for some time. In reality, closing unused credit accounts may cause your credit score to drop in the short-term, as you will have higher credit balances spread out over a smaller overall credit account base.
2) Avoid Having A Lot Of Credit Report Inquiries
An inquiry is noted every time someone looks at your credit report. Don’t make the mistake of allowing too many inquiries on your credit report, as it may may seem that you have been rejected by multiple lenders. Which means that you should be aware of who looks at it. You can minimize the number of inquiries on your account by approaching lenders you have already researched and are interested in doing business with.
3) Don’t Think That You Only Have One Credit Report
A lot of people mistakenly talk about having a “credit score” when in reality credit reports often include three or more credit scores. There are three major credit bureaus in the United States that develop credit reports and calculate credit scores, and also a number of smaller credit bureau companies. When looking to improve your credit report, you should not concentrate just on one number. You should contact the three major credit bureaus and work on improving all three credit scores.
4) Having No Loans & No Debt Will Not Improve Your Credit Report
Some of us make the mistake of believing that owing no money, having no credit cards, and avoiding the whole world of credit will help raise the score on their credit report. When in fact, the opposite is true. Lenders want to know about your past ability to manage credit, and the only way they can figure it out is by the score on your credit report. Having no credit at all can actually be worse for your credit score than having a few credit accounts that you pay off on time. If you currently have no credit accounts at all, opening a low balance credit card can actually increase your credit score.
5) Never Do Anything Illegal To Repair Your Credit Report
It seems pretty obvious, but plenty of people make the mistake of lying about their credit score or worse, falsifying their loan applications because they are ashamed of a bad score. Not only is this illegal, but it is also completely ineffective at repairing your credit report. Your credit score is easy to check and, not only will you not fool lenders by lying on your credit report, but you may actually face legal action as a result of your dishonesty.