How to Improve Your Credit Score

credit score image with emoji faces

Increasing Your Credit Score A credit score reflects credit payment patterns over time, with more emphasis on recent information. You can check your credit report to read a summary of what goes into your credit score. Take the following steps to improve your credit score.

  1. Pay your bills on time. Late payments can have a major negative impact on credit score.  Paying your bills on time is the most important contributor to a rising credit score.  Let’s say you own a small amount of debt, it is important that you keep your payments on time.  A Few other tips would be, minimizing outstanding debt, avoid overextending yourself, stay away from applying for credit needlessly.
  2. Keep balances low on credit cards and other “revolving credit.” High outstanding debt can affect a credit score. Keep in mind that the small balances you might have on a number of credit cards, eliminating nuisance balance is a great way to help your credit score move in an upward direction.  The reason this strategy could work is because one of the items that influences your score is how many of your cards have balances.
  3. Apply for and open new credit accounts only as needed. Don’t open accounts just to have a better credit mix. It probably won’t improve your credit score.
  4. Pay off debt rather than moving it around.
  5. Also, don’t close unused cards as a short-term strategy to improve your credit score. Owing the same amount but having fewer open accounts may lower your credit score.
  6. Keep good old debt on your record.  What is good debt?  Good debt is debt that you’ve handled well and paid as agreed.  The longer your history of good debt is, the better your score will become.
  7. Keep risk to a minimum.  Two of the biggest mistakes are, missing payments and suddenly paying less or more than you usually do.  Other changes that could scare your card issuer but not necessarily dent your credit score could be, taking out cash advances, or even using your cards as businesses that could indicate current or future money stress for example pawnshop or a divorce attorney.

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