You’ve finally done it. You’ve made a plan that will allow you to work on improving your financial situation and reach your financial goals. One of your goals is to raise your credit score. There’ve been some bumps and bruises in your credit history (or maybe you simply don’t have a credit history), but you’ve put those behind you and now want to work on improving your credit score. What should you do? What should you not do? What are the best steps to make sure you have a good credit score?
There are steps that you can take that can help you raise your credit score in a timely manner. Here are 7 things you can do to improve your credit score.
7 steps to a higher credit score
- Check for and repair any errors. Get a free copy of your annual credit report at AnnualCreditReport.com. Be sure there’s no written off or unpaid bills on your credit report. If there is, pay them if they truly belong to you. If the bill doesn’t belong to you, have the company that reported the bill remove it from your credit report.
- Pay off small, miscellaneous balances quickly. Get those small credit card and other balances paid off quickly. It makes your credit report appear clean and organized.
- Keep an eye on your balances. If you have a credit card that is near or above 70% or so of the credit limit, this is a risk flag for credit reporting agencies that things may be getting out of control and your credit score may be lowered because of it. If you have high balances on your credit cards, get those balances paid down as soon as possible. In an ideal world for optimizing your credit score, the credit card balances would be paid in full each month, or at least below 30 percent of the credit limit.
- Don’t have too many credit cards with open credit floating around. It’s best to stick with under 4. If there are several other cards out there with available credit, close them, but do it slowly; say one card every six months or nine months.
- Be on time with payments. Never be late with your payments. Schedule them automatically if you need to in order to be sure you pay your bills on time.
- Pay more than the minimum due. Pay more than the minimum due when you can on your credit cards. It helps to show your financially responsible nature.
- Get a credit card. If you don’t have a credit card, get one – even if it’s a secured card. Use it every month and pay it in full every month or keep a very low running balance (under $500) on it. This is a great tactic for raising your credit score if you’ve recently come out of a bankruptcy or if you’ve never had credit and want to raise your credit score. The key to doing this responsibly, however, is to make sure your balances don’t become higher than you can handle.
Raising your credit score is possible with a bit of work and commitment. A high credit score and a clean credit report can be helpful in many areas these days, from getting approved for loans, to helping you get that job you’ve applied for to helping you keep your insurance rates low. Do what is within your power to raise your credit score today.