Improving Credit Scores

By Andrew Cho

As consumers struggle with the present economic conditions, the issue of credit continues to haunt many Americans. As banks become more stringent on granting loans, consumers are finding it harder to finance their purchases. It is this lack of credit worthy individuals that is hindering both the housing and auto industries. Without loans, it is nearly impossible for the average buyer to purchase either a home or automobile. Needless to say, before any economic recovery can be seen, we must tackle the credit problem facing America.

So how can Americans with bad or no credit improve their rating? Unfortunately, there is no quick solution to this problem: it requires patience and persistence. One of the first things consumers can do is make sure that their bills are paid on time. This is a way to show future lenders that you have the ability to pay back what you owe, and create a certain level of trust. Another component to establishing good credit is to start off small. A lender would like to see that you are financially responsible with a relatively small amount before taking on more risk with a larger sum. Finally, review your credit report at least once a year to know where you stand. This is especially important because mistakes do happen on occasion, and not realizing the mistake made can be detrimental to your overall credit rating.

As stated above, improving your credit score can be a long and arduous journey. However, if the proper steps are taken, it is something that can be achieved. Above all else, always remember that just because you've made a few late payments or have defaulted on a loan, it does not mean the end to your credit line. There is always something you can do, as a consumer, to improve your standing.

Sources Used:
http://genxfinance.com/2008/02/05/15-ways-to-establish-and-improve-your-credit-history-and-fico-score/

http://money.cnn.com/2008/10/20/pf/saving/toptips/index.htm?postversion=2008102012

http://www.federalreserve.gov/pubs/creditscore/default.htm