Credit is confusing, yet it’s one of the most important aspects of adult life in America. Here are ten ways you can raise your credit score, starting today.
Keep Tabs On Your Credit
You have to know your credit rating and the dings on your credit report in order to work towards raising your credit score. Request a free credit report annually from the three major reporting agencies here. It’s recommended that you monitor your score at least monthly, though, which you can do for free through platforms like Credit Karma.
Stay In Touch With Your Debt Holders
It may be the case that the reason your credit is lower than you want it to be because you can’t pay your debt balances off. If that’s the case, at the very least stay in touch with your debt holders. Most credit card companies are willing to work with you to set up minimum payments. They at least want to know that you’re aware of the negative situation and want to deal with it, which can go a long way to avoid them sending your balances to collection agents.
Get a Secured Credit Card
If you currently have or can get an unsecured credit card, then this advice is not for you. If you don’t and can’t, getting a secured credit card can do wonders for helping get your credit back on the right track. Basically, how it works is you pay a deposit down and the credit card company will give you a credit card with a limit of your deposit amount. Over time, if you make payments on time consistently, the company will raise your limit (without you having to add to the deposit) and eventually you can qualify for an unsecured card.
While getting a secured credit card can help build credit, applying for many credit cards will negatively impact your score. Keep your credit applications to a bare minimum. This will help keep your score healthy and allow it the chance to increase. You don’t need, or want, many credit cards to build your credit. Focus on the ones you have or your secured card and go from there.
Leave Accounts Open
If you do have existing credit accounts, try to leave them open. Credit history is an important factor considered in your score. If you have accounts that are open for a long time and in good standing, this will improve your score. Try to keep an account open consistently, even if you use it very little. This will help especially if you’re in the early stages of building credit as time goes on.
Pay On Time
On-time payments are a huge component to your credit score. If you do look to build your credit through credit card utilization, make sure you do so by charging small amounts that you can manage to pay each month. Consistent payments toward debt will raise your score. Late payments will hurt it.
Don’t Max Out
Along with paying on time, you want to pay close attention to how much of your credit allowance you are using. If you have a $500 limit on a credit card, try to avoid charging $495 on it, as this negatively impacts your score. It’s a complicated game, but basically, creditors want to see that you have a handle on your cash flow and this is one of the measures they use. If you keep your total credit utilization below 50 percent then you’ll be in a great position to improve your credit.
Pay Off Debt
Debt is tricky, often times because it already exists people figure they may as well leave it be and hope for the best. It’s understandable, as other financial priorities in day-to-day life do come up. Try your best to pay off debt as you can, even if it means little monthly payments. If your debt is in negative standing or delinquent, it will negatively affect your score. If you pay it down, your score will increase.
Seek Professional Advice
For better or worse, many of our society’s opportunities are dependent in one form or another on your credit score. If you are serious about raising your score and positioning yourself in the best possible way financially, it’s worth it to consider professional credit counseling. Locate a professional here.
Remain Consistent And Determined
Ultimately, credit scores don’t increase overnight. In most situations, you’ll wait a minimum of three to six months to see any changes in your score, and even then, they may only be by a few points (which is still great). The key to building good credit and improving scores is playing the long game. If you keep tabs on your score and manage your payments properly, you’ll be fine. Just keep this last point in mind whenever you’re tempted to stray from your plan. In the long run, you’ll be happier to have a good credit score!