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Learning How to Improve Your Credit Score

Many people are confused by credit scores. A credit score is a number that represents the information found in a person's credit files. If you have a credit score of less than 760, that score can prevent you from getting the best interest rates on home loans, auto loans and insurance. In some cases, it can affect your ability to qualify for a job, or even a cell phone. If your credit score is less than stellar, there are things you can do to improve it. Here, you will find out how to improve your credit score.

1. Get copies of your credit report from all three credit bureaus. You can usually get a free copy once per year.

2. Study your reports with a fine-toothed comb, looking for mistakes, such as accounts that are not yours. Keep your eye out for old accounts. Check the statute of limitations for your state to see if these accounts are valid.

3. If you find mistakes, contact the credit bureau, and ask them to verify the information. If they cannot do so, they are required to remove it from your credit report.

4. Pay off as much debt as you can, and pay your payments on time. Every credit card or loan you pay off will raise your credit score. If you have accounts in collections, instead of ignoring them, call and offer to pay a settlement, usually less than the full amount.

5. If you really want to know how to improve your credit score, learn how to manage your money. Create a budget, and stick to it. Stay away from credit cards and loans whenever possible. Save for special purchases and vacations, and keep just one credit card for emergencies, but pay it off each month.

Your credit score is an important number. Since it can affect so many aspects of your life, it is important to keep your number high, so that you will look like a good risk to lenders, such as mortgage bankers. Getting out of debt, and learning to manage your money well are the keys in learning how to improve your credit score.