How to improve a low credit score

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Credit scores are used to evaluate whether you are eligible for a loan and how much you will be paying for it in tranches. Therefore, it is important to keep a healthy credit score. This chart shows how the interest rate for an auto loan can jump from six percent to 18 percent based solely on your credit score. If you are well too familiar with the effects of a bad credit score, it’s not too late. There are ways of improving it.

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The first thing is to make sure your credit score is accurate. CNN.com reports that “Twenty-five percent of credit reports contain errors serious enough to deny consumers access to credit, favorable loan rates and in some cases a job…”

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Get familiar with the factors that affect your credit score. These include your payment history, amounts owned, length of credit history, new credit, and types of credit used. Since 35 percent of your credit score is based on payment history, make sure your bills are paid on time. Do not max out your credit cards. Leave at least 25 percent free because amounts owed make up 30 percent of your credit score. Keep your old accounts because credit scores also consider how long you have maintained your accounts.


Resuscitating your credit score will take a lot of financial discipline and vigilance, but it will be worth it. The best time to start improving your credit score is now.

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