7 Ways to Improve Your Credit Score

Credit Score

Having good credit is important to make larger purchases. Bad credit can happen to good people. Paying a couple of bills late can drop a credit score by hundreds of points. Here are 7 ways to improve your credit score and get back on track to having good credit.

Credit Score

1 Keep Balances Low:

Your credit score can be affected by how often you use your credit cards and how much money you are charging. It is recommended to keep your balances below 30 percent of your credit limit. Even if you are paying your balances in full but are charging a large amount of money it can have a negative effect on your credit score. To help keep the balances low see if the credit card company will accept several smaller payments throughout the month.

2 Pay off the Balance:

In addition to keeping balances low it is best to pay off the balances on the credit cards. Start with the cards with smaller balances. After doing this work on paying the balance on other credit cards down.

3 Old Debt is Okay:

Many people feel that old debt on their credit report is a bad thing. This is not the case. Negative items will be removed from the credit report after a 7 year period. Paying off larger items such as a home or a car can be left on the credit report. This shows that you have a history of paying off your debt and you can be counted on to make the payments.

4 Applying for Credit Too Soon:

When shopping around for the best rates for car loans or even home loans in a short period of time this can cause your credit score to drop. This is due to the fact that you are looking for additional credit to use. There are some ways to tell if you are getting a good rate without hurting your credit score. Some lenders ignore credit inquiries that are made within 30 days of scoring. After this time period the inquires that you requested will be counted as one inquiry.

5 Pay Bills on Time:

One of the easiest ways to improve your credit score is to pay your bills on time. Even if you are only paying the minimum amount make sure you pay it on time. If a collection agency is called because you are not paying your bills or paying them late this can have a negative effect on your credit score.

6 Use Credit Wisely:

If you are taking cash advances on your credit card or decreasing your monthly payment you can hurt your credit score. To improve your credit score keep payments consistent. Sudden changes in credit usage can make you a risk to credit card companies.

7 Do Not Get Worked Up:

Improving your credit score is simple. All you need to do is pay your bills on time and use credit wisely. Do not make large purchases or purchase things that you do not need.

You can get your credit report free of change once a year. Be sure to keep on top on your credit especially if you are looking to make large purchases.