10 Steps To Improve My Credit Reputation

1. Pay your bills on time

     As far as possible, strive to pay up in full and on time. Late or missed      payments will certainly lower your credit worthiness. Therefore, be sure      to check your bills to see when payments are due. Late fees and interest      penalties add up quickly and make it hard to pay the balance.

     Payment history is an important factor in determining your credit      worthiness. Since recent history carries more weight than what      happened five years ago, getting in the habit of making on-time      payments is an incredibly powerful way to improve your credit      worthiness.

2. Pay down your debts and consider charging less

     Lenders like to see plenty of breathing room between the amount of      debt reported on your credit cards and your total credit limits. The more      debt you pay off, the wider that gap and the better your credit      worthiness.

     When you pay the full balance on your bill each month, you are taking      advantage of an interest-free loan from the card issuer. If you make only      the minimum payment on a significant balance, it can take years to pay      off the full debt.

     If you are unable to meet the payment deadlines, let your financial      institution know and the reasons why.

3. Limit the number of credit cards you own

     Avoid multiple sources of credit. It is more manageable to keep track of 2      credit cards than 10. Opening a new credit line may reduce your credit      worthiness, especially if you do not have a long and favorable credit      history.

4. Cancel any unused cards

     If you have many credit card accounts but are only using a few, it is a      good idea to close out the unused ones. However, it is advisable to keep      the cards that you have had the longest and cancel the new ones as a      long record of prompt payments will improve your credit worthiness.

5. Stay out of bankruptcy if you can

     Bankruptcy is the most catastrophic impediment to your good credit      reputation -- far worse than delinquencies, loans or collections. Its      impact, however, is dependent on how many defaults you made on your      credit before you filed.

6. Don’t be afraid of credit counselling

     Most of us want to pay our bills on time and as agreed.      However, there could be unforeseen circumstances such      as loss of employment, business failure etc, which makes it      impossible to settle the minimum payments on the due      dates stipulated by the bank.

     If you’re overloaded with high-interest debt and are in      danger of falling behind on your payments -- or you      already have -- consider working with a nonprofit agency      such as Credit Counselling Singapore to set up a debt      repayment plan. They can help you to reschedule      payments with the creditors, negotiate lower interest      rates and help you pay off your bills within a few years.

7. Get your credit report

     Your credit report is a record of your credit payment history      compiled from different credit providers. As most lenders      will check your credit file to assess your credit worthiness      prior to making a decision, a good credit repayment history      will make it easier for you to obtain credit and to qualify for      loans.

     By reviewing your credit report regularly, it allows you to      be aware any information that is uploaded on your credit      file. The other advantage of monitoring your credit file is      that it protects against possible fraudulent use of your      personal details to obtain credit.

8. Know the differences between Debit Card and
    Credit Card

     When you charge a purchase on your credit card, you have      a minimum of 30 days to pay the bill. If you do so, it will be      to your benefit as you’re taking advantage of the card      issuer’s money as a no-interest loan, provided you pay      the balance in full each month.

     On the other hand, when you charge a purchase on a      debit card, your bank will deduct your deposit account      immediately. If you do not have sufficient funds in your      bank account, the transaction will not be accepted.

9. Don’t close accounts if you still have debt
    remaining on them

     Closing accounts before they are fully paid can hurt your      credit worthiness. If you are planning on not using a      certain credit card anymore, you should wait to close it      until after you have paid it off. In order to keep yourself      from charging, simply cut up the card into pieces and keep      it in a drawer.

        People are bombarded with new credit card offers all the         time. While it may be OK to sign up for a new credit card         here and there, it is a bad idea to sign up for several at         once. This sends a signal to creditors that you are         desperate for credit and are a risk to loan to. Resist the         urge to sign up for many credit cards at once and don’t         overextend yourself.