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Updated on May 28, 2011

You want to raise your credit score right?

In my continued effort to assist people encountering one difficulty or another in obtaining a mortgage/car or automobile loan, I have put together this practical ways of increasing your credit score, as applied by my three distinct friends: Jeni, Bill and Ikenna. Though they (earlier mentioned friends) all live in the United States, this same procedure can be applied anywhere in the world. Therefore, this is not just ‘how to increase a credit score or rating in America’, it applies to all countries where credit card is used for daily activities.

In my previous hub “Untold Secrets Why Banks Disqualify People for Credit”, I mentioned some of the benefits of having a healthy credit score or rating. This single reason alone, has led to the disqualification of so many loan applicants in most countries. In the past, people cared less about their credit score until they are in need of a loan, and probably approach a bank or a lender for a loan. This culture must change- learn to keep your credit score above average (if possible).

Another secret people don’t know about credit score, is that it helps you get a more favorable interest rate and plan.



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What is this thing, ‘credit score?’

Before I move on with this topic, let me stop by and explain in brief, what a credit score or rating is. Credit sore can also be referred to as a credit history rating. Just like we have class performance percentage rating ranging from 0% to 100%, credit score ranges from: 300 to 800. But it is practically impossible for one to attain a 800 credit score, no matter his or her status. But a credit score of 730 and above, is a good or excellent one, and you stand better chances of qualifying for better loan plans with probably good interest rates.

How is it calculated?

Credit score is calculated based on your credit history with lenders from the very first day you applied and start using a credit card.

Some factors are used to rate a borrower’s credit score, they include:

- Period or length of credit history (how long you have been lending)

- Repayment history (history of repayment of previous credits or loans)

- Size of current outstanding debts (how much you are currently owing)

- Current credit usage (how are you using the available credit limits on your credit cards)

- Credit balances (total number of credit cards with balances)

- Any history of late repayment, etc

If your credit score is below 600, you need to do something to raise it up to stand a better chance of qualifying for better loans and credits. So what do you do to raise your credit score?

Faster ways to raise your credit score

In my previous hub: “Untold Secrets Why Banks Disqualify People for Credit”, I elaborated some easy ways to repair your missing credit history, which is quite different from raising your credit score. The previous one talked about repairing your missing credit score resulting from certain bank policies, while this is focusing on how to increase your credit score rating. You can still go back to the previous hub to learn how to repair a missing credit history, just go here

1.      Pay off past outstanding debts: if you have previous outstanding debts that are still unpaid, clear them up to boost your credit rating.

2.      Develop a credit history if you have none existing: if currently, you do not have a credit history, you can develop one by getting a family member or friend who trust you, to act as your co-signer for a low credit card.  When you must gotten one, don’t abandon it, start using it to pay for certain basic things, and make sure you pay off the balance at the end of each month. This will help develop an excellent credit history for you.

3.      Do your best not to cancel any credit card: instead of cancelling a credit card, pay off the balance but make sure you keep the credit card existing. This is a common sense, which shows that you are a trustworthy borrower and not hit and run…which improves your credit rating.

4.      Stop consuming more of your credit balance: if you always consume or use more than 45% of your credit balance, you are doing more harm to your credit rating…desist from it.

5.      Quit living above your means: if you fail to control your wants, you will end up acquiring more and more debts that you may find difficult to repay, which will definitely damage your credit score. Therefore, stop pushing everything to credit card, live within your means.

6.      Prompt payment of bills: the more faster you pay off your outstanding bills as at when due, the more trust the lenders will have on you...which also improves your credit rating.

7.      Always track your credit report: the more often you check your credit report, the more conscious you are to keep it healthy. There are free trials to help you do this…callcredit or Experian can help you to do this for free before deciding to subscribe.

8.      Correct every single mistake: There are also some other errors that are bound to occur or appear on your credit record: closed accounts, joint accounts with an ex or former, electoral roll (ensure that your registered address in the electoral roll is correct, before you apply for a credit).


If you discover any error or missing information, seek for correction immediately. For instance, you missed a payment- you can add a short paragraph explanation why it happened.

If you follow the above procedures, your credit score will always remain in good health, and you stand better chances of qualifying for good loans with better interest rates.

Have you ever applied for a loan or credit?

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