There’s no need for you to stress yourself out if you have bad credit score. This is for the reason that there’s just a lot of ways to improve your credit score. If you have a credit score of 700, you have a good standing and have huge possibilities to be approved with loans, mortgage or credit cards. However, if your score is lower than that, it’s time for you to improve it as early as you can. How are you able to do it? Well, here are the five ways on how to improve your credit score:
Pay Bills Your Bills on Time
Paying your bills on time month by month will surely help in boosting your credit score. Delinquent payments could easily harm your credit score, most especially if they regularly happen. Most of the lenders will even check your FICO score in order to determine whether they will give you a loan and at what rate you’ll be able to get it. A FICO score of 35% for the general population depends on the history of your payment. Thus, how prompt you pay your bills can surely affect your score.
Time to Lower the Utilization Ratio of Your Card
The process of credit scoring always looks at the ratio of your debt to the total amount of credit you have available. Thus, you can add up your credit limit in order to see where your position is. Getting rid of your debt is a long-term goal, but having a short-term target such as shrinking your ratio less than 50% and gradually doing them until you’re done would be beneficial.
Regularly Check Your Credit Report
You might not know it but errors on your credit reports are quite common. So, one good way on how to improve your credit score is to comb over your credit report. Most versions of credit reports point out the items that are certainly detrimental to your score. Keep in mind everyone is entitled to a free credit report. You only need to go to these three major credit card bureaus such as Equifax, Experian or TransUnion.
Balance Your Credit Card
If you have a number of cards that are closely being mixed out, yet you still have the ones that are open, but have very low balances, then transferring some of the balance from larger cards to the other is the best way to improve your credit score. This will help to even out your balances and credit card usage and of course, increasing your credit score as well.
Take Note of Your History
If you are planning to close some of your accounts, you need to think again. At some point, it is a sensible thing to do in order to simplify your financial standing. However, closing your account could easily damage your credit score. For the record, the moves you thought to be sensible could surely hurt your credit score just like using a single credit card for most of the charges you make.