We all know that banks and credit card companies are cutting credit limits in record numbers. On the heels of a slumped real estate market, high unemployment and a full blown recession, people are seeing their credit scores drop even further.
Because the financial industry is attempting to protect itself from further losses, they’ve began reviewing consumer’s credit lines, credit cards and home equity loans and are slashing the limit to reduce loss potential.
The problem with this is that its quickly plummeting the credit scores of millions of consumers credit reports. Since there is little you can do about that, here’s a few tips to boost your credit score as much as possible.
Review your credit reports and check what your credit limits are. If the limit has been reduced, then focus on paying the associated debt connected to it to lower your debt ratio. A debt ratio is the amount you owe in correlation with the amount you have available. You want to owe less than 35% of the available credit. Since your credit line may have been cut, paying this balance down will increase the score.
Do not ignore medical bills. Doctors and hospitals are getting more aggressive to collect unpaid medical bills and if you do not pay it, the debt will no doubt-ably end up at a collection agency who will place the debt on your credit reports. Once its on the credit report, you will have to try and negotiate a payoff in exchange for a deleted account, which can be difficult.
Make sure you set up payment terms on those medical bills to avoid the account being turned over to collections to begin with. You’ll save yourself a whole lot of headache and your credit rating.
Avoid those cash advance loans. Those do nothing to improve your credit because they are risky. Try to open legitimate accounts such as credit cards, auto loans or home loans. Furniture loans and cash advance loans should be avoided.
Finally, don’t ignore your credit. Annual credit reports are available for free once a year to all of us. Annualcreditreport.com will allow you to see your credit reports online within minutes. Set aside some time and go through your credit reports and make sure everything is accurate.
Mistakes on your credit report can seriously affect your credit score.
More resources to help you boost your credit
- How long can bad credit remain on your credit
- The cost of bad credit
- Fixing your credit with debt settlements
- Avoid credit repair scams
- Free credit repair tips
