How to Raise Your Credit Score and How It Affects Your Life in a Big Way

How to Raise Your Credit Score and How It Affects Your Life in a Big Way

by Richard Fonfrias,

J.D. Chicago’s Financial Rescue &

Bankruptcy Lawyer

Fonfrias Law Group, LLC


Your credit score is the key to your life!

No, not really, but it seems like that. After all, when you want to borrow money, rent an apartment, get a new credit card, open a department store charge account, and even buy car insurance, you may be surprised to learn that your credit score will be checked each and every time.

And if your credit score isn’t good, you will either be denied credit – or the cost of whatever you want to do will increase.By this I mean that your car insurance will cost more than if you had a good credit score. Also, the apartment manager may require a higher security deposit. The interest on your loan will be higher. You name it, and a bad credit score will work against you.

So before you apply for any financial transaction, check your credit reports. Here’s why:

  • Credit reports often contain errors. You may be penalized with a higher interest rate or have your loan application denied because of misinformation in your credit bureau file.
  • Credit reports contain old information. If the companies and lenders you work with have not updated your file, you may have to pay a small fortune due to out-of-date records.
  • Credit card limits reported in your credit file may be wrong. The amount of credit you carry directly affects your score. And if the wrong credit limit is reported by the credit bureau – or to the credit bureau – you’ll pay a hefty price by having a higher than acceptable debt to credit ratio.

So how do you increase your credit score so lenders see you as a good risk?  Follow these steps:

  • Don’t use your credit card for everything you buy. The more often you charge to your credit card, the lower your score will be.
  • Pay off or pay down your credit cards as quickly as you can. Your revolving credit cards affect your credit score more than mortgage loans and department store accounts. So keep careful track of your credit card habits because they have a big effect on your credit score.
  • Review your credit bureau reports often. Incorrect information in your file can sink your chances for a good score.
  • Open a secured credit card account if you can’t get one that’s unsecured.  In a secured account, you deposit money with the lender, who then gives you a credit limit that corresponds to the amount of money you have on deposit.  This is a good way to start and, if you pay on time, the lender will usually give you an unsecured account in a year or so.
  • Shop for a car loan. With a poor credit score, the bank probably won’t approve your loan.  But finance managers at car dealerships often know where you can borrow money.  After you pay on your car loan for two years or so, a bank or mortgage lender will probably okay a home loan.