Small, and sometimes significant, improvements to your credit score can be made with some relatively simple changes in behavior.

Always be cautious with your new found credit worthiness, that it doesn’t end up leading you to even more credit problems.   Once your credit improves, instead of rushing out and getting things that won’t help your financial future, consider using your new credit power to renegotiate your current credit, with lower interest rates so that your monthly bill is lowered, and contribute the difference to debt reduction.

It pains us, as debt collection attorneys in Florida, to see people that could be making small incremental changes to their credit behavior, that could ultimately find themselves out of debt, not doing so.

Grow your credit score

Here’s the 4 simplest ways to improve your credit.

1. Check your credit report for mistakes.

Yes, there are mistakes, there’s identity theft, people forget to take paid bills off your record, you can track when certain debts are set to expire and plan your credit accordingly.  How can you improve something without measuring it?   Check your score often!

2. Always pay bills on time.

A $200 Power bill, with a $50 late fee, and a $35 bounced check charge, followed by a $100 reconnect fee…. and your $200 power bill not only hurt your credit, but it cost you an extra $185, money that could have been used to help pay down other debts.   The world is far less expensive when you pay on-time.

3. Reduce your outstanding debt.

Even $10 extra with every payment.  The idea is  lower the income to debt ratio.  Everything you pay, but don’t consequently spend the new credit, will lower your credit score.  Making minimum credit card payments will sometimes not even cover your credit card fees and interest charges.  That means making minimum payments could even hurt your credit scores as the ratio of credit to available credit never changes, never goes down.

4.  Negotiate Credit Limits.

Here’s a tricky one, because if a credit agrees to extend you more credit, the knee jerk want, is to go spend more money.  What we really want to see is a creditor granting you more credit, but you don’t increase the amount of debt.  This increases the ratios of debt to available credit, and makes you look better on paper as you go and apply for that mortgage.

Try calling your credit card companies once or twice a year and asking for a credit increase.  A no answer won’t hurt you, a Yes answer, will improve your credit score, as long as you are disciplined.

The simple truth is people with better credit scores, pay less for their credit.  If you were to diligently work on lowering your scores, and leveraging those scores into lower credit costs, the savings could be re-invested in paying off even more debt.. and in that never ending circle you find yourself on the road to responsible credit use, and a great credit score.

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