8 Simple Ways You Can Improve Your Credit, Right Now

Whether it’s buying a new car, home, taking out a loan, or financing a new car your credit will determine if your goals are in reach. Good credit is fundamental to carrying out any of your financial goals. Your credit score or your FICO is a run down of your credit history. It lets lenders know how responsible you are when it comes to paying off debt, and if you are capable of paying your bills on time. Creditors will look at your past behavior to determine if they will extend you more credit. Improving your credit score is essential, and can take some work these tips can help improve your score and keep it there.

1. Self- Control and Discipline

Many factors contribute to boosting your score that you may not even realize. Such as having a 30 percent or less credit utilization rate this is achieved by charging less than your total available credit. Having open cards that have a zero balance also factors in to calculating your score. Both of these facts show lenders that you have self-control and discipline.

2. Check Your Credit Score

This is important, and may seem very obvious but it is common to ignore your credit score due to fear or unwanted stress. If you plan to buy a house, car, or any big purchase in the future checking your credit score will become very important. You can get a free copy of your credit report here, and you will be able to see any negative balances and see how you can improve your score going foward. If you are in search of even more help organizing your debt. You can get a free copy of your credit report here. There are plenty of places to help you start to organize your debt such as Credit Sesame, Creditfirm.net, and Fresh Books.

3. Understanding Your Low Score

In order to improve your credit, it is important to first understand what it means to have negative reports. Negative information on your credit report stays for seven years, and as long as it is present it will lower your score. While both late and missed payments will hurt your score, it will also hurt your score if you decide to settle an account for less then you originally owe. If you do happen to come across a chunk of (tax season, inheritance) it is always a great choice to pay some amount instead of not paying at all. There are many alternative options so before you make any big decisions make sure you sit down and think about the best option for you.

4. Start Small

If you have managed to rack up a collection of credit cards that have minuscule balances. Your best option would be to focus on paying them all off due to a big part of your credit score being calculated by how many open cards you have with balances. It’s best to just keep one go to card to not only avoid stress but to ensure yourself that you can maintain a credit line. If you start small you can set yourself up to pay off bigger debts later on.

5. Keep Old Credit Lines

Whenever you successfully pay your payments on time, or even pay a debt off in full your credit score will rise. A lengthy score is a good thing as long as you have maintained your payments. If you have an old card that you have successfully maintained rather then closing that card keep it open. To not only show good faith, but it will also work to bump up your credit score.

6. Auto- Pay and Schedule Payments

The last thing you want to do is miss a payment or even worse be late for a payment. The best way to ensure this does not happen is to give yourself a calendar reminder or set up auto-pay. Many creditors and banks allow you to set up auto-pay ( directly taken from your checking account) this way you never miss a payment.

7.  Maintain All Loans & Bills

Credit reports cover all negative balances, not just credit card debt. It is a common misconception that only credit card debt lowers your score. This consist of student loans, late utilities bills, and even phone bills. It can be difficult to keep up with all your bills so make sure you are checking your credit report often and ensuring you are not forgetting anything.

8. Break Up Payments

When you break payments into two monthly installments  it lowers the total amount you pay over time. This is a great way to improve your credit, while also potentially saving some money.

What are some things you are doing to lower your credit score?
Any lessons learned along the way?


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