The economic downturn has gotten the entire country in an uproar. Prices of basic goods are soaring, employment is going down, and interest rates are jumping from as low as 1.7% to as high as 25%. One thing that the economic collapse has proven is how important good credit rating is.
Banks have upped their interest rates to astronomical heights since the economic crisis began. They have also drastically lowered the credit limits for most credit holders. In most cases, those who have bad credit ratings come out worse off than those with good ratings. This is only logical, as banks place more trust on people with good credit and are more willing to give them some leeway. They are also more anxious to keep the business of people with good credit rating.
For those who are in heavy debt, getting out of it in this economy can be very difficult. Paying off high interest rates with very little extra cash and with a bad job market only worsens the problem. Fortunately, people with bad debt can get their interest rates adjusted to more reasonable levels. Again, those who have good credit ratings get off lighter than those who do not.
The simplest way to get your credit score high is to make sure that you don't have any debts in the first place. This means paying off your bills before the deadline. Usually, the more consistent you are at paying on time, the higher your score gets.
One of the biggest culprits in getting your credit score down is your credit card. Make sure to use it wisely. A good rule is to keep your balances low on all your credit cards. Keep in mind that the proportion between what you owe and what is available to you in your credit lines is what dictates your score. Another important issue related to this is closing unused credit cards. Unused credit cards mean unused credit available to you. If you close the card, you will lower your available credit, which will affect your credit score.
It is also not advisable to apply for too many credit cards. Although getting a lot of credit cards increase your available credit, which helps your credit score, you might be labeled as a risky borrower instead, which will lower your credit score.
In the event that you find it difficult to pay off your credit cards, make arrangements with your creditors for a lowered interest rate or some other plan to help you keep up with your payments as soon as you can.
It is important to remember that getting your credit score higher can take time. You will have to keep at it if you want your credit rating to improve.