Consumers can increase their credit ratings by monitoring their credit reports and correcting any errors, reports Forbes. They can also keep at least one credit card but use it sparingly, pay bills on time and raise their credit limits when possible. They should not cancel credit cards they already have.Continue Reading
Consumers can receive one free credit report per year from each of the three main credit reporting agencies, which are Experian, Equifax and TransUnion. They can obtain all three at once or order them one by one and check them for mistakes, according to the Federal Trade Commission. If the consumer finds errors and reports them, the credit reporting companies must investigate and correct any inaccurate information.
Consumers should maintain at least one credit card but keep the credit utilization ratio down by paying bills on time and keeping the balance low, advises Forbes. If necessary, they can make more than one payment per month to keep the balance well below the limit. Consumers should also ask their creditors to increase their credit limits, but they should not use the higher limits to increase their spending. They should not cancel credit cards, as this decreases their amount of available credit, which has negative impact on a report. However, they can pay off small balances on underused credit cards and use just one or two for all their bills and purchases, suggests Bankrate.Learn more about Credit & Lending