You may have a less-than-desirable credit score right now, but it doesn’t have to stay that way. A high credit score can open many doors for you in the world of finance. Here are certain things you should do to improve your credit score.
Check Your Credit Reports
The data in your credit reports have a direct impact on your credit score. So, it’s a good idea to review your credit reports from time to time. If you spot any inaccuracies or fraudulent charges, make sure to contact the credit bureaus and get it corrected so it doesn’t affect your score.
Pay Your Bills on Time
Your credit score takes a big hit when you default on your bill payments. Keep in mind that certain types of payment defaults can stay on your credit report for several years. So, it’s best that you pay your bills on time. If you find it challenging to keep track of your bills, consider automating your payments, whenever possible.
Keep Your Credit Utilization Low
Although you may be approved for a particular credit limit, it’s smart to not use up all of it. In fact, most financial experts recommend keeping your credit utilization to under 30% of the available limit. If you use too much of your credit limit, you may not be able to improve your score.
Don’t Close Old Credit Card Accounts
The length of your credit history makes up 15% of your credit score, meaning older credit accounts will affect your credit score positively, provided you pay the bills on time. So, even if you don’t use certain credit cards anymore, consider keeping these accounts open since it can positively affect your score.
Don’t Carry a Balance
It’s best to not carry a balance on your credit card. Not only does carrying a balance attract a high rate of interest but it will also increase your credit utilization, which will affect your credit score. So, as far as possible, try to repay your credit card bills in full every month.
You can’t drastically improve your credit score in a matter of days. However, if you follow the above-mentioned tips, your credit score will go up!
