“How to Improve Your Credit Score” plus 1 more

Posted: 16 Feb 2012 04:00 AM PST

One of the most frustrating experiences is being turned down for a loan because of your credit score. Your ability to borrow money isn’t the only thing affected by your credit score, though. Insurers might use your credit score to determine your premiums. A low score could mean that you pay more in premiums. Others, including Internet service providers and landlords, might be interested in your credit score as well.

Indeed, more and more, your credit score is being used to make judgments about your ability to handle your finances. If a low score seems to indicate that you are irresponsible, it will be difficult for you to take advantage of the best offers and loan terms in the world of finances. If your poor credit score is holding you back, here are some things you can do to boost your financial reputation:

Pay Down Some of Your Debt

One of the items that shows up on your credit report is how much debt you have. If you are using most of your available credit, it counts against your credit score. You can look as though you are in a better position by paying down some of your debt. Keep your credit card balances to less than 30% of your credit limits. This way, you’ll appear more able to handle the credit that you have.

Get Current on Your Bills

If you have fallen behind on some of your payments, catch up. Your credit report contains a record of each month’s payment history. When you are on time each month, it shows. When you miss a payment, your credit report reflects the number of days you are behind. If you have some accounts you are behind on, bring them up to date so that your on-time payments can begin overwhelming the negative items. The longer you go without missing a payment, the better off you’ll be — and the higher your credit score will be.

You should understand, though, that paying off a collection account won’t remove it from your credit report. It can remain on your account for years. It’s better, though, for the account to be shown as paid off, rather than still open.

Maintain Good Credit

More on Credit Score

Once you have managed to improve your credit score as much as you can, it’s up to you to maintain a good credit score. The truth is that excellent credit is achieved only after months — or years — of consistently credit-positive behaviors. One of the best ways to maintain good credit over time is to make on-time payments. Be sure to pay on time and in full each month. You can set up payment reminders, or have your bills automatically deducted from your account. That way, you don’t have to worry about paying late.

Also, be aware of the length of your credit history. Your credit score takes into account how long you have had credit, and how old your accounts are. Don’t close older accounts because that can reduce the length of your credit history — and drop your score. Be wary, too, of opening new accounts. Too many newer accounts can also damage your score. Be selective of the accounts that you open, and carefully consider which accounts to close.

Fix Errors on Your Credit Report

Your credit score is based on information reported in your credit file. In the U.S., you are entitled to one free credit report each year, from each of the major credit bureaus, by visiting www.annualcreditreport.com. You are also entitled to a free credit report whenever you are rejected for a loan based on information in the report. In Canada, you can write in to receive a free credit report by mail. And, of course, you can always pay a fee to access your credit file.

When you locate a mistake, go through the process of disputing the error so that it is fixed. When negative errors are repaired, your credit score often benefits.

With a little planning and responsible behavior, you can improve your credit score, and find a variety of opportunities opened up to you.

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Dollar Matters: Tax Season in Full Swing

Posted: 15 Feb 2012 09:02 AM PST

Tax season is in full swing. Next week, I’m meeting with my accountant (better get my P&L statement together), and we’ll be doing the e-File thing. Here in the U.S., tax filing is due April 17 (we get a two-day extension this year). In Canada, the tax filing deadline is April 30.

Financial Highway is offering a great online H&R Block giveaway. You could win free filing codes (for Canada). The faster you file, the faster you get your return! In the meantime, here are some great posts about tax time — many of which work for the U.S. and for Canada:

How to get ready for Tax Time in 6 easy steps

Over at Thirty Six Months, Marissa offers a step-by-step guide to getting ready for tax time. The steps break it down for you, helping you avoid the dreaded last minute scramble.

10 Tax Tips You Absolutely Must Know This Season

On Learn Vest, Alden offers 10 great tax tips. Before you prepare your taxes this season — or have someone else prepare them — make sure to read these tips.

The Buffett Rule is a great replacement for the alternative minimum tax

Kay at Don’t Mess With Taxes knows that many of us in the U.S. struggle to understand the AMT. If only the Buffett Rule were implemented; she thinks it would be a great replacement.

Essential Tax Tips For Americans Living Abroad

Over at Business Insider, there are a few tax tips you can learn if you are living abroad. Well, if you’re American.

Does Your Roommate Qualify As a Tax Deduction?

On the Tax Blog at Tax Debt Help, I take a look at whether or not your roommate can be considered a dependent — and therefore a tax deduction. If you’ve got a freeloader, you might at least get some tax benefit.

How I Ended Up With A $5,000 Tax Bill This Year. Oops!

Peter at Bible Money Matters ended up with a big tax bill this year. Find out what he did wrong — and how you can avoid the same fate.

Tax Efficient Investing for Retirement

Todd at The Digerati Life provides a helpful look at how you can improve your tax efficiency in retirement. Better investing during your years as a retiree.