How To Increase Credit Score | Improve Credit Score
It’s possible to improve your credit scores by following a few simple steps, including opening accounts that report to the credit bureaus, maintaining low balances, and paying your bills on time.
You can try to boost your credit score by getting credit for paying bills like your cell phone, utilities, and popular streaming service. In this post, we will give you some tips to improve your credit score.
## Tips To Improve Your Credit Score
Build Your Credit File
Opening new accounts that will be reported to the major credit bureaus, most major lenders and card issuers report to all three, is an important first step in building your credit file.
You can’t start laying down a good track record as a borrower until there are accounts in your name, so having at least several open and active credit accounts can be helpful.
Don’t Miss Payments
Your payment history is one of the most important factors in determining your credit scores, and having a long history of on-time payments can help you achieve excellent credit scores.
To do this, you’ll need to make sure you don’t miss loan or credit card payments by more than 29 days payments that are at least 30 days late can be reported to the credit bureaus and hurt your credit scores.
Pay Down Revolving Account Balances
Even if you’re not behind on your bills, having a high balance on revolving credit accounts can lead to a high credit utilization rate and hurt your scores.
Revolving accounts include credit cards and lines of credit, and maintaining a low balance on them relative to their credit limits can help you improve your scores.
Those with the highest credit scores tend to keep their credit utilization ratio in the low single digits.
Catch Up On Past-Due Accounts
If you’re behind on your bills, bringing them currently could help. While a late payment can remain on your credit report for up to seven years, having all your accounts current can be good for your scores.
Additionally, it stops further late payments from being added to your credit history as well as additional late fees.
Limit How Often You Apply for New Accounts
While you may need to open accounts to build your credit file, you generally want to limit how often you submit credit applications.
Each application can lead to a hard inquiry, which may hurt your scores a little, but inquiries can add up and have a compounding effect on your credit scores.
Opening a new account will also decrease your average age of accounts, and that could also hurt your scores.
Final Words
Credit scores are determined by computer algorithms called scoring models that analyze one of your credit reports from Experian, TransUnion, or Equifax. Follow the mentioned steps to improve your credit score.
FAQ
Q.1 What is a good credit score?
Ans: The lowest credit score you can have is 300 while the highest is 850.
- Poor (300-579)
- Fair (580-669)
- Good (670-739)
- Very Good (740-799)
- Excellent (800-850)