When denied a credit card or a loan, which is dependent on good credit, those applying usually ask themselves how do I improve my credit score? It is not a difficult question to answer and basically consists of common sense. A credit score is bad because of an error in reporting or the person is not a good credit risk. It does not get any simpler than this, in the way of an explanation.
How to improve a credit score is determined by how bad the credit is. If someone has gone into bankruptcy and defaulted on a loan, many years are required to fix this problem. After all, the loan was taken out and not paid back in its entirety, a breach of faith.
There are 3 credit rating agencies that issue FICO scores, which are based on a scale from 350 to 850. It is a formula mathematically based and invented by two people, their names forming the acronym FICO (Fair Isaac Corporation). Sometimes one agency will have a different picture of an individual than the others. The rating agencies are not perfect, and will especially be noticed, if your score is low and you always pay on time and more than the minimum.
To improve a credit score requires payment on a credit card early and certainly a great deal more than the minimum due. Perhaps twice the minimum. Those that pay on time are certainly preferable risks to the lenders than those who do not. But, if you pay on time with never a monthly interest rate charge, the credit card companies are not making money from your use of their cards.
Do not miss a loan payment whether it is a credit card, mortgage, car payment or anything else. If you wait for the last minute the payment might arrive late. In these times a bank might hike your interest rate for this. Do not assume that paying online is faster. Many times mailing a payment will get there faster.
The best advice on how do improve my credit score, revolves around not taking out any loans that cannot be paid back easily. A “rainy day fund” of six months worth of earnings should always be present to meet bill payment requirements, in case you are terminated from your place of employment. The longer your bills are paid promptly and more than the minimum, the better your credit will get.