Tips To Improve Your Credit Score

A credit score is something that people want to get as high as possible because it affects numerous factors in life. These include getting approved for a car or home loan, personal loan, credit card, housing, or even a job. Whether just starting out with credit, working on building it up, or repairing bad credit, keeping these credit score tips in mind can help individuals slowly improve their score to a point where they are comfortable with where they stand.

  1. Pay on Time

The biggest factor that impacts credit is on-time payment history. It’s essential to pay bills on time and don’t allow payments to be late, even by a few days. A credit report lists the status of open accounts and whether there have been any payments that were 30, 60, or more than 90 days late. Past payment history is a good indicator of whether a borrower is a risk to creditors or not. Nothing can eliminate late payments, but continuously making on-time payments can cause the score to increase over time.

  1. Lower your Balances

Carrying a high balance on credit cards can cause the score to drop. The utilization ratio is calculated by dividing the individual’s overall current balance by the amount of available credit they have available. Aim to keep utilization below 30 percent for the most favorable impact on credit score. It shows that a person knows how to manage their credit and utilize it responsibly.

  1. Check your Report

Verify that everything on your credit report is accurate. A balance that is reported incorrectly or a late payment that didn’t happen could be a large hurdle in the attempt to improve credit score. Call to dispute any inaccuracies or concerns that might have come up during the review.

  1. Keep old accounts open

Credit history includes the age of your lines of credit. Don’t close an account once it’s paid off because it will likely hurt credit score since it’ll reduce the amount of overall credit available. Exercise self-control and keep the cards tucked away if you don’t want to use them. There is no harm in keeping accounts open as long as a person isn’t racking up new charges to pay on with added interest.

Credit scoring doesn’t follow a clear-cut formula. Consumers can utilize these credit score tips to raise their score and become more appealing borrowers to creditors.