If improving your credit score is your goal, the first step is to request your free credit reports from each of the three credit reporting agencies. It’s important to know where your credit score currently stands before you move ahead.
Secondly, pay your bills on time. Up to 35% of your credit score is based on whether you have been paying your bills on time each month. If you haven’t already done so, set up bill pay with your bank. You get reminders when a bill is coming due and then paying them is just a click away. Postage stamps are so 20th century anyway aren’t they?
Next, do not max out your credit cards. You should never use more than 30% of your credit limit anyway. Common sense prevails here, using credit cards is spending money that you have not even earned yet. If you need your credit cards to make ends meet, it’s time to get a second job.
How To Improve Your Credit Score
- Know your current credit score and monitor it regularly
- Find and fix any errors you find on your credit report
- Keep your credit to debt ratio low, never max out your credit
- Make larger than minimum payments before the due date
- Use a secured credit card that reports to the three bureaus
You need to have a long credit history. The average length of time you maintain various lines of credit is important. It may not be wise to close those old accounts. Even after you payoff those old balances, leave those credit card accounts open.
Don’t shop around for credit too often. Multiple inquires into your credit can damage your score so be careful.
Improving Your Credit Score
Improving your credit score is very important and the bottom line for getting a great score is pay your bills on time, keep account balances low, and take out new credit only when you need it.