"The information provided on this blog is for general informational purposes only. It is not intended as professional financial advice. Please consult a professional before making any major financial decisions."
1. Pay Your Bills On Time
This might sound obvious, but it's the most important thing you can do. Late payments will hurt your credit score. Make sure to pay all your bills on time.
2. Keep Your Credit Utilization Low
Credit utilization is the percentage of available credit that you're using. So, if you have a credit card with a $1,000 limit and spend $500 monthly, your credit utilization is 50%. A good rule of thumb is to keep it below 30%. The lower your credit utilization, the better it looks to creditors, which helps boost your score.
3. Don't Close Old Accounts
You might think closing old credit accounts will help your score, but it can actually hurt it. A big part of your credit score is the length of your credit history. The longer you've had credit accounts open, the better it is for your score. Even if you don't use an old account anymore, leave it open as it can help.
4. Check Your Credit Report for Mistakes
Sometimes, your credit report can have errors, like incorrect information about missed payments or accounts you didn't open. You can get a free copy of your credit report every year from the three major credit bureaus (Experian, Equifax, and TransUnion). If you spot any mistakes, contact the credit bureau to get them fixed.
5. Make More Than the Minimum Payment
If you can, try to pay more than just the minimum payment on your credit card. Paying only the minimum can cause you to rack up interest and keep you in debt longer. If you can afford it, paying extra will reduce your balance faster and show creditors that you're responsible with credit.
6. Avoid Opening Too Many New Credit Accounts
Every time you apply for a new credit card or loan, the lender will do a hard inquiry on your credit report. Too many inquiries can lower your score. Only apply for new credit when it's necessary, and try to space out your applications.
7. Use a Mix of Credit Types
Your credit score can improve if you show that you can handle different types of credit, like credit cards, loans, and store cards. But don't open too many new accounts at once just to mix things up. The goal is to show that you can handle different types of debt responsibly.
8. Become an Authorized User on Someone Else's Account
If a family member or close friend has a good credit score, you can ask them if they'd be willing to add you as an authorized user on their credit card. This allows you to benefit from their credit history, which can help raise your score, as long as they keep their payments on time.
9. Settle Any Past Due Accounts
If you have any accounts that are past due, try to settle them as soon as possible. Even though it might take some time, working with creditors to get caught up can help improve your credit score over time.
Bottom Line:
To boost your credit score, focus on paying bills on time, keeping your credit use low, and checking for errors on your credit report. Avoid opening too many new accounts and don’t close old ones. With steady habits, your score should improve over time.
I didn’t realize keeping old accounts open could help. I always thought it’d be better to close them.
ReplyDeleteIt isn't spoken about too often, that's why I wrote this article, Good Luck
ReplyDelete