Tips to improve your credit score

Your credit score is your credit history converted into a numerical value. The higher the score indicates a “good” credit history. A low score indicates a “poor” credit history. In most circumstances, the rate you pay on a loan is determined by your credit score. Ahigh credit score usually means a lower loan rate. Areal low score may cause you to be denied the loan. If you have no credit history, the lender will assign you a score, probably right in the middle range.

Since your credit score is so important, here are some tips on improving your score.

• If you are having trouble making your loan payments, contact your credit union or bank. They will normally work with you to adjust payment. Often, they will have a credit counselor on staff to help you. If not, seek professional/ legitimate credit counseling.

• Pay your bills on time. If you have missed payments, get current and stay current.

• Keep your credit card balances low. Pay off the debt and don’t move it to another credit card unless the new rate is really low and is a fixed rate.

• Do not close unused credit cards as a short term strategy. This could affect your credit score negatively.

• Do not open a number of new credit cards just because the offer was good or you got “reward points.” This could actually lower your score.

• If you have had credit a short time, avoid a lot of new accounts.

• Paying off a collection item will not remove it from your credit report. But, lenders like to see that collection items have been paid. Contact whomever you owe on a collection item. Offer to pay it off at a reduced amount. You can probably negotiate the amount. Start with 50% and see what happens. • Ask your credit union or bank to close out joint accounts and open individual accounts. If you have a joint account with someone, the total amount of credit and how it is handled impacts your score.

• Remember this on the way to improve your credit score. It takes time, maybe a couple of years, to convert a “poor” score into a “good” score. Michael Raley may be reached at

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