Improving your credit score should always be part of financial planning. A good credit score can save you a huge amount of money in the long run especially when you have to buy big ticket items such as a house or a vehicle. For example, having an outstanding FICO score could mean zero or low down payment, lower monthly payments, and lower interest that you have to pay. Other advantages of having a good credit score is also for employment and lowering your monthly insurance payments. Companies with high profile job openings would take a look at your credit score as a requirement for getting the job. Jobs are mostly in financial sectors that would want this. Insurance companies also provides lower premiums for people with good or excellent credit scores.

There are a lot of ways that you can improve your FICO score. While most people go through those credit repair companies, you do not have to utilize those companies to enhance your FICO score.

Below are the basic ways to improve your FICO score:

Have A Closer Look At Your Credit Card Balance
Please keep in mind that the bigger your total balance as a percent of your total credit limit across all the credit cards, the lower your FICO score would be. Experts say that you lose 1 FICO point for every percent of your credit limit that you utilize. So if you have a total credit limit of $5,000 and have an outstanding balance of $2,500 (50%), your FICO score would be 50 points lower than if you had a $0 amount. Keep in mind that if you do not pay off your total credit card balance in full, you should attempt to keep it below thirty percent of the aggregate total credit cards amounts.

Adjust Your Spending
Payments made to your credit cards may take a few weeks to get reported by the creditors to the credit agencies. By not using your credit card at least 60 days before applying for new loans, there is a good chance that all the payments you have made to date will be applied toyour FICO score by the time a loan companies requests your credit report.

Always Pay On Time
If you can,try to pay your credit card account in full and send it as soon as you receive the account statement. If you cannot pay the balance in full, you should at least pay the minimum amount due.

Avoid Applying for Credit in a Short Period
Creditors usually do not want to see a borrower who has gone on a credit spree in a short time. This is due to the fact that it increases the risk of you defaulting on the loans.

Do not Close Unused Account-
Closing a few of your unused accounts will greatly raise the debt to credit limit ratio. Please keep in mind the first method - try to keep your balance below thirty percent of your total credit limit. As an example, assuming that you have three credit accounts, which have credit limits of $5,000 each but one of them is inactive but the total balance is $5,000 on the rest of the credit cards, closing the unused credit card would raise your total debt to credit limit ratio from thirty percent ($5,000/$15,000) to 50% ($5,000/$10,000)

Be Cognizant of Your Credit
Always check your request for a credit report and review it to identify any mistakes made. Generally, you can obtain a free copy of your credit report annually form the free annual credit report website. When you request for a report, obtain for your FICO score as well, too. Also, checking your credit report would allow you to see if there are any identity thieves trying to opened or have already opened accounts in your name.

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