5 Tips for Raising Your Credit Score
Your credit score is so much more than just a number. It’s attached to your entire identity and can affect all sorts of areas of your life. From being able to get a job, to renting a house, to even getting a cell phone contract, your credit score is important!
Raising your credit score may feel like wandering in the dark if it’s new to you, however, with the right strategies in place you can make significant improvements over time and ultimately see a score that you’re happy with. Here are some essential tips for raising your credit score.
Reduce your Overall Balances
If you find yourself under a mountain of debt it can be incredibly difficult to get out of. With interest piling on top of interest, it can feel impossible to ever pay off your bills. That’s why you need to reduce your overall balances to under 30% of your overall credit.
If you have extremely high balances, create a repayment plan to reduce your step debt slowly over time. If you can manage to lower your credit card balances to under 30% of your overall credit allowance, you’ll see your credit score bounce up almost immediately.
Pay on Time
It’s so simple, yet so effective. Raising your credit score starts by paying your bills on time. Consistently paying your bills before or when they’re due will show creditors that you’re capable of paying back what you owe. Never missing a payment is important if you hope to not only bring your score up but keep it up. If missing deadlines is an issue for you, consider setting up automatic payments. This helps never missing a payment without having to do a thing.
Check Your Credit Report
One of the most important things you should do regularly is to look at your credit report. It’s not uncommon for there to be errors that don’t belong there. That’s why it’s up to you to check regularly an insurer you catch anything early on. Your credit report can be obtained for free by contacting any of the three major credit bureaus. If you do find something that doesn’t belong there, dispute it immediately and have it corrected.
Keep Old Accounts Open
The age of your credit score plays a significant role in how high it is. So, closing old accounts even though it may seem practical to do If you’re not using them anymore is only going to do you a disservice. Keep old accounts open, especially if they have no annual fees. This will show creditors that you have a good payment record in your history, and can positively change your score in the future.
Don’t Open Too Many New Accounts
Don’t make the mistake of trying to open too many accounts at the same time. Each time that you apply for a new credit card, the creditor makes a hard inquiry on your credit report. This temporarily lowers your score, and it shows creditors that you may be desperate for funds.
Apply for a new credit card every few years rather than every few months, and focus on maintaining the accounts you currently have rather than constantly trying to get new ones.
