Your credit score is one of the most important factors in your financial life. The current recession makes it even harder for consumers to get approved for a loan or line of credit which is why it is so crucial to have good credit.
If you have good credit and can afford to make purchases during this time you can get some great deals. However, if you are already in debt, don't have an emergency fund, savings account or retirement account you need to reevaluate your spending habits. While you are working on improving your spending habits you can also follow these 5 tips to boost your credit score so when the time is right you can make a purchase and get the best deal possible.
1. Change your mindset. You have to change the way your currently spend money and develop good spending habits so you make good choices when making purchases, buy in terms of needs vs. wants.
2. Get current on late bills. Pay old or late accounts immediately. Setup payment plans for bills that cannot be paid in full.
3. Establish credit. Open a secured account if you have bad credit or no credit to re-establish credit history. Use non-traditional forms of credit to establish history such as Pay Rent Buy Credit (Payment Reporting Builds Credit).
4. Keep balances low. Keep your credit card balances at 50% or below the credit limit. This shows you have good spending habits are not seen as a credit risk.
5. Don't open new accounts. Don't open any new accounts more than once every year when trying to improve your credit history. You will be seen as a credit risk and this will lower your credit score.
