Boost Your Credit Rating

The global credit crunch has made it harder than ever to borrow money. Banks have been burnt by incurring billions of dollars in bad debt from mortgage customers unable to make repayments. As the crisis has deepened and spread worldwide banks have become much less likely to lend money to each other and the cost to the banks of lending money has risen sharply. As the banks now have less access to money they are getting picky over who they lend to and if you want a good rate on a mortgage or car loan your going to need a good credit rating. Credit ratings can easily be damaged by missing a few bill deadlines or failing to keep up with your repayments. It's important to know what you can do to keep your credit file as clean as possible and boost your rating so you have the best access to finance.

Stay on top of your bills. Nothing can deflate your credit rating like a late or unpaid bill, as this is the most significant factor in determining your credit rating. The highest priority bills are those from your credit cards or finance companies as failing to pay these on time is likely to result in bad marks on your record! You should find most credit card issuers and utility firms will offer a direct debit or automated payment system. Take advantage of these options, as your bills will be automatically deducted from your bank account - and you'll never have another excuse for a late bill again.

Carry less debt on your credit cards. Your credit rating is also impacted by the level of debts that you carry and have available to you on your credit cards. If you're in the habit of spending and carrying a monthly balance on your credit cards, hide them in your sock drawer and start paying down that massive debt. If you remove your credit cards from your wallet it will make them less tempting to use and ensure you spend in your means. I have some friends who put their credit cards in the freezer in a plastic bag filled with ice! Everyone is different but find something that suits you!

Don't close old accounts. This is perhaps one of the most surprising tips, as many credit counselors previously told their clients to close all accounts that they weren't using. Closing too many old credit card accounts can even hurt your rating as it lowers to amount of credit available to you.

Get some counseling. Credit counseling is not just for those faced with bankruptcy. If you think your credit score needs some beefing up, then try enrolling with your local credit counselor. These counselors are trained to help you create a household budget and train you to live within your needs. The skills they teach you will not only help you get in control of your debts now but will help you repay debts effectively throughout your life.

Knowing and protecting your credit rating is probably one of the most important things that you can do during the current credit crisis. By boosting up your credit rating you can save yourself big money in the long term on interest charges and will ensure your not on the casualty list of the credit crisis.