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How You can Improve Your Credit Score 

Your credit score plays an important role in your personal finance. If you have a good credit score, you will not have any problem in getting a mortgage or any other loans. Many homeowners check the credit score of prospective tenants' before renting them their homes. Now, you may get a loan even if your credit score is low, however, the interest rates will be higher. Hence, it is important that you maintain a good credit score. Following are a few ways how you can improve your credit score. 

Do not miss the bill due dates 

It is imperative that you pay all your bills on time if you want to have a good credit score. Every time a payment or an installment is missed, it will be reported to the credit bureau. It can stay on your credit report for 7 years. Now, missing the payments for a few days will not hurt your credit score, there is, in fact, a 30-day window. It applies to all debts, including mortgages, car loans, and so on. However, it will hurt you financially, you will be required to pay a late fee. 

Opt for a credit card, do not overuse it 

Having a credit card or two is good for your credit history. As long as you make the payments on time, your credit history will show a good credit report. It can help to improve your credit score. Now, do not use your credit card for each and everything. Try to keep the credit utilization ratio below 30%. This is important because the credit bureau may think that you are a spendthrift if you use your credit card always. Even if you diligently pay the dues, it will not help. For some reason, if you want to spend extra on your credit card, ask the bank to raise the credit limit. 

Old debts on the credit report is not bad 

A number of people try to get rid of the debts (good debts) from their credit report as soon as they are paid off. This is not a good idea. Bad debts, where you missed due dates and so on, will automatically be removed from your credit report after 7 years. A record of the good debts will help to improve your credit score, the longer they are there, the better. Hence, it is recommended that you leave the good old debts and your good old accounts in your credit report as along as possible. 

Apply for a new loan/credit card after improving the credit score 

If you have a bad credit score, then it is better to wait for some time before applying for a new loan/credit card. The reason for that is a rejected loan/credit card application also finds its place in your credit report. Most of the banks will not give you a loan, be it short-term installment loans, emergency loans, personal loans, or mortgages if your credit score is not good. The more the number of rejected applications, the more it will hurt your credit score. If you wait for some time and pay all your bills on time, your credit score will improve, and the banks/financial institutions will consider your loan/credit card application favorably. 

A credit score is something that you cannot improve instantly. However, by being patient, and being diligent with your bill payments, you will definitely be able to improve your credit score.