Building Good Credit
Boost Your Credit Score Simply by Asking
The higher your credit score the easier it is to qualify for credit and to qualify for lower rates and better terms. One way to improve your credit score is by improving your credit used to available credit ratio (the amount you have borrowed versus the amount you are allowed to borrow.) For example, say you have a $10,000 credit limit on a credit card and have a balance of $9,000. Your ratio is 90%, since you are using 90% of your available credit (on that card.) The lower your ratio, the better your credit score since that implies you use credit wisely. You can improve your ratio by paying off balances, but you also may be able to improve you ratio by asking creditors to raise your credit limit. If you have a $10,000 limit, a balance of $9,000, and you ask for your limit to be raised to $12,000, your ratio instantly goes from 90% to 75%. Since every 20-point increase in your credit score is likely to result in lower interest rates or easier to access credit ask and you may receive.