How to Raise Your Credit Score
January 9, 2020
A good credit score signals good financial health, and with more than just a fair score, creditors will be more confident about extending you a line of credit in its various forms and at some of the most favorable terms.
Good news is that there is quite a bit that you can do to boost and improve your credit score. Some of the simple steps you can take to help you get there include the following:
1. Review Your Credit Report
Know exactly where you stand by requesting your credit report. Have a thorough look and see what’s working against you, and where you are doing well. It will give you an idea of where you need to focus your efforts.
You may also come across errors in your report. Be it a late payment or penalty, or outdated information. Follow the proper channels to dispute these inaccuracies and get them removed from your report. These fixes may boost your score up some points.
2. Always Remember to Pay on Time
Do everything you possibly can to ensure that you always pay your bills on time. Set up payment reminders in your calendar or planner. You may also want to consider setting up automatic payments with your bank or charging these payments to your credit card for easier and more convenient paying off.
3. Make Frequent Payments
Instead of making one lump payment at the end of the month, you can make mini-payments every week, or every two weeks. Doing so will keep your balances at a minimum, which will improve your credit score.
4. Don’t Be in A Rush To Apply For New Credit
With every application for a new credit line, you attract a hard inquiry on your credit report. Too many of these enquiries within a short time can negatively affect your score.
If you must apply for a new line of credit, do so only if you know you will be approved so you don’t risk lowering your credit score for an application that may only end up as denied.
5. Leave Your Old Accounts Open
Your credit age matters and longer is always better. Don’t close your old credit accounts even if you have no intention of using them again. If you must close any accounts, go for the newer ones.
When you have available credit but don’t use it, it will only help boost your score. Keep your old accounts fully paid off so that they show you have available credit.
6. Watch Your Credit Card Balance
Avoid maxing your credit cards, as a lower credit utilization will help your credit score. Pay down any outstanding debt on your credit card as soon as possible.
Aim to keep the balance on your credit card to at least 30% of the amount of credit available to you on that card. The lower your credit utilization, the better for your score.
7. Mix Up Your Credit Accounts
If you must open a new line of credit, it helps if the account type is different from your other existing active accounts. As long as you maintain a history of timely payments across all accounts, it helps your credit score to diversify or have a mix of accounts.
It may take up to several months, or even longer before you see your credit score go up. With consistency in doing what’s highlighted above and more, you can keep negative elements such as delinquencies off of your credit report and raise your credit score. The results of your diligence will be well worth it, however long it may take to get there. If you’re looking for a proven debt solution with someone who’ll be there with you every step of the way, contact our office today. We can help you get on the right financial path to reach your goals.