Tips on How to Improve Credit Ratings

Nearly everyone knows that if you have a poor credit history, you will discover that it is more difficult to obtain a new credit account or open up a loan of any kind (automobile, mortgage, student, or installment). Did you also know that a low rating can lead to higher interest rates, low limits, or restrictive terms? Whether or not you are already aware of all of this, you might be able to benefit by reading up on a few tips on how to improve your credit ratings and enhance your opportunities to get better interest rates on any account that you open up in the future.

Register to Vote at Your Current Address to Make Your Application More Appealing to Lenders

Did you know that some lenders take the information that you provide regarding your name and postal address and compare it with the electoral register to verify the information? This strategy is used as a precautionary measure against fraud. If you haven't yet registered to vote, then the lender has nothing to validate the data contained in your application. You should take the time to register to vote and give lenders proof that you live at the address provided on your application. At the very least, it could expedite your request so that you receive an answer of approval  more quickly. Plus, if your credit history is also good, this strategy can assist you in getting better interest rates on any lending product that you apply to receive.

Obtain and Review Your Annual Credit Report for Accuracy

Lenders make use of consumer's credit reports on a regular basis to assist them in determining whether or not they want to extend credit by way of a loan, new mobile phone account, mortgage, new utility contract, or credit card. If your report contains inaccuracies, you could be denied credit based upon information that isn't even true. A poor rating can also prevent you from obtaining the best interest rates available. It really does pay to take the time to review your annual report for inaccuracies in order to ensure that you achieve the highest credit rating possible for your particular situation. Not doing so can keep you from living the lifestyle that you want.

What kind of information should you  look for when reviewing your report? You'll want to take a glance to verify each of the following pieces of information is accurate:

Employment situations (current and past)

Legal troubles, including charges of illegal activity and lawsuits

Financial associations with ex-partner

Payment histories and balances

If you discover that any of the information is inaccurate, you should take steps to correct them. Contact the credit union from which you obtained your report and ask for information on what you need to do. Don't forget to also ask for the names of any forms that you must fill out.

Juggle Requests for New Forms of Credit Throughout the Year Rather Than Clustering Them

It is really important that you juggle any requests that you make for new types of credit throughout the year rather than clustering them within weeks of each other. Many lenders view this type of activity (frequent requests) as a sign of desperation since it suggests that you need to borrow money right away. Spacing the requests out indicates that you have a temporary need for more funds.

Close Out Accounts That You No Longer Use

Unused accounts can be used against you by a lender who is deciding whether or not you have already extended your finances beyond a reasonable limit. Even if you no longer have a balance on the account, the credit limit is still in place, adding to your existing ability to borrow funds.

Ideally, long-standing accounts that get regular usage with a good history of repayment are worth more to you than a bunch of small, rarely used ones. However, it is important to try and keep all existing balances to within 25% of your overall credit limit for all of your accounts combined.

Restructure Your Budget If You Have Been Late on One or More Payments

Making timely payments is a positive step toward getting lender approval for any new loans or accounts that you attempt to obtain. It suggests that you can handle your finances properly and without overstretching your limits. In order to make a timely payment, you must provide the payment by the date and time listed, while also providing the proper amount of funds for repayment.

Sam Jones  the author of this article recommends to his readers who are looking for ways to deal with their debt problems to visit  http://www.uswitch.com/credit-reports/improve-credit-score/ website from uSwitch.