SmartMoney Monday: Improving your credit score

HONOLULU (HawaiiNewsNow) - Last week, we talked about how to find out your credit score and why it's so important . Today, we're going to learn how we can improve it. Let's say your credit score isn't as high as you'd like it to be, and can negatively impact your ability to get a loan or a low rate, what can you do?

There are several things anyone can do to improve their credit score. The first is to make all your payments on time. Your credit card payments, loans, bills– everything. As much as 35% of your credit score is based on on-time payments, so don't be late with your payments. Another important factor impacting your credit score is whether or not you carry a big balance on your credit card. A good rule of thumb is to use less than 50 to 60% of your credit line. So, for example, if you have a credit card limit of $10,000, try not to carry a balance of greater than five or six thousand dollars. If possible, it's always better to pay it in full, but that may not be possible.

Generally, you want watch how much debt you have. The more debt you have relative to your income, the more it can negatively impact your credit score. You should also know your score. Sometimes, there can be mistakes on your credit report than can hurt your score. So you have to check your credit score consistently to make sure it's accurate. The credit companies are required to let you order one free copy of your credit report each year and some credit card companies offer free FICO scores as a benefit.

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