One repercussion of our current financial crisis is a credit crunch. What does this mean to you?
It means it will be that much harder to get everything from a credit card to a mortgage, car loan, home equity loan...the list goes on.
One of the most important things you can do is improve your credit rating by raising your FICO score, which can be as high as 850. If you need your credit card company to raise your spending limit, having a better credit rating will make the bank more likely to comply.
A score over 720 is excellent, but if you are starting from a lower number, don’t panic. Here are some ways to raise your score.
• Don’t use more than 50% of the available credit on any account. If you have less than 50% available, request limit increases on your existing cards (but don’t charge more once you have a higher limit!)
• Avoid too many inquiries. Another reason to avoid applying for multiple credit cards is you want to avoid too many inquiries into your credit report from credit card companies and lenders.
• Pay your bills automatically. Late fees can really hurt your credit score. By paying your bills online and automatically you can prevent late fees and keep your credit score intact.
Don’t delay. Do it now, before you need to do it but don't have time on your side.