How To Improve Your Credit Score
The credit score system is a very important economic tool that can have a big impact on everyday financial decisions you make. It’s vital to have healthy credit to be approved for the loans, credit cards, and even jobs you want. However, it can feel overwhelming to face a damaged credit score head on.
Tips On How To Improve Your Credit Over Time
Here are a few tips for how to improve your credit score quickly so you can build a strong financial future for yourself:
- Always Pay on Time
Always pay your monthly debt payments on time. This means paying your credit card minimums, mortgage payments, title loan bills, and any other debts you have on time. Your payment history is the biggest percentage of your credit score–about 35%.
- Pay Off Debts
If you have the extra income, pay off more than the minimum required for your debt. When you decrease your debt and increase your available balance on your credit cards, you will be able to see a big difference in your credit report.
- Keep Your Balances Low
If you are able to pay down enough debt on your credit cards, then try to keep your balances low so that there is a higher percentage of available credit on all of your cards. This has a highly positive effect on your credit score.
- Stop Applying for New Credit
When you get too many hard credit checks done, your credit score can suffer. Too many hard credit inquiries on your report, you risk more financial rejections which can harm your score. Take a break from applying for anything new and just focus on what you have.
- Don’t Close Accounts
After you’ve paid down a credit card and don’t plan to use it anymore, don’t close the account. Leave it open and unused. If you close that account then however much of a limit you had on that card will suddenly disappear, significantly decreasing your available credit. You want a lower percentage of used credit which means you need to keep your available credit percentages as high as you can.
- Dispute Inaccuracies
Take a close look at your credit report and compare it to your receipts and personal records. Is everything accurate? Are there any inconsistencies? A sure-fire way to increase your credit score is to identify any discrepancies on your report and get them fixed as soon as possible.
- Become an Authorized User
Ask a family member or close friend with good credit to list you as an authorized user on one of their credit cards. You will get a higher available balance in addition to a longer length of credit and good payment history. You don’t even need to use their card, as being an authorized user simply allows you to benefit from their good credit.
Making Credit Score Adjustments for the Future
There are so many ways to improve your current financial standing. All it takes is a little strategy, hard work, and patience. If you stick with the strategies listed above and give it some time, you will be sure to see results that make you a more appealing borrower to lenders.
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