5 Easy Tips For Improving Your Credit

Monitoring your credit report and credit rating is important, especially if you are considering purchasing a home. Here are five tips for improving your credit. These aren't going to be quick fixes but responsible financial activity that over time will improve your credit.

1. Get a credit card: Okay, I know this may be a bad idea for a lot of us, but let me explain. When used correctly, a credit card can be an effective tool to build your credit. Charge a few budget conscious items each month, and pay off the balance before the due date. For example, some bills we have every month that we normally pay with our checking account can be paid with this credit card and then pay it off before the due date. Beware though, it can be a slippery slope if used incorrectly.

2. Keep your balance low: This is what I would consider using a credit card correctly. Try to only use your credit card for purchases that you could pay for out of pocket at that time. Also try to keep your balance at only about 10% of the limit.

3. Fix credit errors: Every year you are entitled to free credit reports. Take advantage of this to review your credit report for any errors that need to be removed, such as incorrect limits or closed accounts. Some Capitalone credit cards offer free credit reporting and monitoring so you can keep an eye on things.

4. Leave paid debts on your report: Paid off car loans or personal loans show that you have a history of paying your debts on time.

5. Ask! If you are looking to pay off debts early it never hurts to ask the lender to lower your interest rate. You never know what will happen if you never ask.