Best Ways to Improve Your Credit Score

Your car insurance rates could be reduced by improving your credit score

If you recently received a high car insurance quote it could be the result of a low credit score. Unfortunately you cannot change your credit score overnight, but you can be adamant about good-credit practices you can take to help you improve your score. Doing so can make payments on your auto insurance and other expenses fall to a more affordable rate. Here are a few steps toward better credit practices:

Pay Off Your Debts

Improving your credit score is extremely difficult when you have outstanding debts. The first step to bringing your score up is paying off these past-due debts. If you do not have the resources to pay them off in one payment, talk with your lender about starting a payment plan. If you have multiple debts consider contacting a debt consolidation company, they will establish one fixed monthly rate that you can pay toward all of your debt.

Pay Your Bills On Time

If you’re focusing on repaying debt don’t let your current bills suffer. Setting up automatic bank withdrawals for your monthly expenses can help you avoid late fees and keep your score from continuing to fall.

Only Apply for Credit Cards or Loans When Necessary

You may be able to save a few dollars on your purchase by applying for in-store credit cards, but every time you do so your credit score decreases. Any time a company accesses your credit report you pay the price, so only apply for loans and credit cards after taking the time to weigh the pros and cons.

Don’t Max Out Your Cards

Just because a credit card provider offers you a high spending limit this doesn’t mean you should use all of the available funds. This too counts against your credit score, so set your own personal spending budget for each credit card in your wallet. It is best to only use half or two thirds of your maximum allowance at any time.

Ask For a New Quote Once Your Score Has Improved

Many insurance providers are willing to renegotiate the quote that you were originally given if you’ve made improvements to your credit score. Once you feel that your credit score has risen to a satisfactory level, give your insurance agent a call and ask about rechecking your credit score. Many providers will only do this once, so make sure you’ve made as many improvements to your score as possible.

Your credit score will follow you throughout many aspects of your life, so once you’ve established a good score, work as hard as you can to retain it. With a better credit score you’ll find yourself experiencing the benefits of lower deposits, lower interests rates and higher spending limits on your credit card. Don’t allow these newfound luxuries put you back where you started – keep in mind that your credit score will always be a work in progress.

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