Which is the Better Way to Raise a Credit Score?

[justcallmebroke]

Okay, my uncle and I were butting heads on this last night. (Granted, it's not a burning life question, but I'd like to know.) Which is a better way to raise your credit score: pay off a credit card balance or ask for a higher credit limit on the card? Or are they both equal?

[Admin]

I would think that paying off a credit card would be more beneficial to one's credit than simply raising your limit. The reason being that when you pay off a credit account, you are essentially eliminating that debt.

With less debt, your credit is than likely to improve.

[justcallmebroke]

Yeah, I've heard something like that. It's funny how the three credit reporting agencies have such a monoply on how our credit looks, yet they don't have any regulations as to what information they put on our credit reports.

[NYC]

Increasing your limit can also help. When deciding your credit score, the credit bureaus look at the percentage of credit you have used overall versus your available credit and at the available credit on each card.

So if you have a $300 credit limit and you have $290 on it, that card shows as 97% usage. If that limit is increasd to $1000 you're now only using 29% of your credit limit.

[Jenita]

1. Get a copy of your credit report

Obtaining a copy of your credit report is a good idea because if there is something on your report that is incorrect, you will raise credit score once it is removed. Make sure you contact the bureau immediately to remove any incorrect information.

Your credit report should come from the three major bureaus: Experian, Trans Union and Equifax. It's important to know that each service will give you a different credit score.

2. Pay Your Bills On Time

Your payment history makes up 35% of your total credit score. Your recent payment history will carry much more weight than what happened five years ago.

Missing just one months payment on anything can knock 50 to 100 points off of your credit score.

Paying your bills on time is a single best way to start rebuilding your credit rating and raise credit score for you.

[woopsi_com]

All points are very correct, but in the end paying down your balances is the best way to raise your credit score. While part of the credit scoring is based on the percentage of credit you are using, creditors would much rather offer you money if you don't already have monetary commitments. Please don't read this as you should not use your credit, this can also be bad for your credit score, just make sure to keep your cards at less than 50% of your available credit limit.

[kaushal1]

One should keep on paying one's monthly bills timely and also pay monthly installments on loan regularly.

[now-or-never]

Debt consolidation is the best offer and option to get back your lost credit score. Once you consolidate your debts you will get a better deal and monthly out going bills will be reduced drastically...

[sweetlou]

actually i dont know much abt this but ur topic is very interesting.

[ryan07]

1-- give all the payments on time
2--- do not delay any of emi of any kinda loan
3-- pay your bills and taxes on time ........