If you’ve been denied credit, can’t buy a house, or know you have a low credit score, there are ways to improve your credit rating so you don’t have to remain in this dubious financial position.

Your credit rating is actually a score, and only those with really good credit get the best interest rates when it comes to buying a house or a car or anything else that requires credit, i.e., paying on installments or over time.

Be prepared for the long haul, as it will take many months to begin to build up your good credit and improve on what you currently have.

  • Pay all your bills on time. The cardinal rule is that you need to establish a pattern of consistent, timely payment for all your bills. No last-minute dash to the post office past the bill’s due date and grace period. You’ll wind up with late payment marks on your credit report, will rack up needless fees for late payment, and ding your credit score to boot. By paying all your bills on time, you’re showing that you are a responsible individual who can manage his or her money. Sign up for online payment, automatic withdrawal from your checking account or charge to your credit card.
  • Pay at least minimum payment. Granted, some bills you can’t pay off all at once, but you should always strive to make at least the minimum payment. Again, pay it on time so that you show you’re responsible and consistent.
  • Stop applying for credit. It does you absolutely no good to keep applying for credit, so stop doing that right now. That means no department store charge cards, no matter how many times you hear you can get a 10 percent discount if you open up one today, no gas cards, no Visa or MasterCard or AMEX. Every time you apply for credit it leaves a trail on your credit report and can actually wind up damaging your chances of improving your credit rating.
  • Make an offer of payment on seriously delinquent bills. Suppose you’ve really fallen behind and have accounts long past-due. Call up each creditor and make an offer of payment, one that you can reasonably handle. Then, make sure to make all the payments, on time, until the balance is paid off.
  • Establish a good credit history. If you’re just starting out and have one credit card, the important thing is to begin building up your credit history – and make sure it’s a good one. Don’t overdo it by buying everything in sight just because you want it. You need to keep in mind that everything you buy on credit comes due. When the bill comes in and you don’t pay the full amount, you’re charged interest that just grows over time. If you have a car loan, this is a good way to improve your credit history. Just pay your bill on time each month for the duration of the loan.
  • Manage your finances. Keep in mind that you only make so much in earnings. You have to pay for food, shelter, gasoline, medical, insurance and many other items. If you are serious about improving your credit rating, you need to learn how to manage your finances so they can accommodate the level of debt you incur. This takes some doing, but the simplest thing to remember is it’s better to be frugal than to be spendthrift.
  • Sign up for free credit reports. Stay on top of your credit history by signing up for free credit reports from AnnualCreditReport.com. This is the official site where consumers can obtain one free credit report from each of the three nationwide credit reporting agencies (Equifax, TransUnion and Experian) every 12 months. If you want to know your credit score after you’ve worked to build up your credit rating, you will be given an opportunity to purchase your credit score after you’ve requested your annual free score.

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