Credit Rising: How To Increase Your Credit Score

Plenty of resolutions this year will center on money and how to be better with it, from developing a plan to save money or simply doing a better job of tracking what you spend.

No matter what money decisions you have on your horizon, you should also consider the prospects of potentially raising your credit score to improve your financial standing. Often lost in the saving money debate is just how paramount your credit score is, and because we're always so concerned with how to amass more cash in hand that your score tends to fade into obscurity as a result.

The truth is your credit score is right up there with a top-notch budget and monitoring your spending to improve savings. A good credit score means that you won't have to worry about securing a loan for the things you need or, even if you are approved for a loan, having to suffer through an interest rate that is hardly doing you any favors. If the average homeowners' mortgage loan is three percent, and you're sitting at six, not only are you obviously paying twice as much interest but the price of your house and the total amount paid is going to skyrocket over a 30 year period. This can have a negative effect on the immediate as well since you're budgeting from month to month, and if you're paying an extra few hundred dollars each month on a mortgage that's money that isn't winding up in your savings account.

Raising your credit score isn't impossible, and even if you're in the 500 range (considered rather poor for a credit score), you can fix it with only a few small changes to how you approach credit in general.

Paying bills late is a sure fire way to kill that credit score of yours, and even if you believe that a few days isn't going to hurt anything, you're wrong about that. The bigger issue is 30 plus days being late, which can be reported to credit agencies and also to collections departments and thus lower your score.

Your credit score also could be in the dumps thanks to having too much debt around two main factors: your income and the amount of credit you have versus credit potential. A $5,000 credit limit is all well an good unless you have a balance of $4,500. That $500 differential is, in fact, going to lower your score.

Not putting enough emphasis on your score means you're overlooking a major financial mover and shaker, and that only is going to equate to difficulty in managing your portfolio and immediately having to deal with rates that are far too high.