Your credit score is your actual grade if your credit report is your financial card. Your rates may not have been as crucial after you graduated from school, but your financial transcript is essential in the world of money, where you will lower your credit score and have to pay higher interest rates on your credit card. It is supposed to show people, like a lender, how trustworthy you are and how likely you will pay back the loan. Here are five ways you can improve your credit score.
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You can pay your bills on time.
It’s not a patronizing thing, but it is worth repeating: Pay your bills on time. Pay your bills on time, one more time. This is the best way to raise your credit score. I know you aren’t aware of this. Okay. Are you doing this already? You might consider enrolling in autopay if you have missed a few deadlines or setting a reminder on your phone for a month to pay those bills.
Do not throw away unused credit cards.
Although this one may seem a bit surprising, please bear with me. Let’s suppose you have some gas cards or department store cards that you don’t use anymore. Perhaps you bought a store card for the additional discount you receive when you purchase, but you have never used it again. A credit score myth is that you should cancel these cards if your goal is to improve credit scores. It’s wrong. It is wrong. You need to have a track record of being able to pay your credit cards bills. One regular bill such as a cable or utility bill is the best way to maintain steady payments. You can set that bill to autopay on each credit card, so you’re technically using the card and not worrying about it. This will allow you to accumulate good payment points.
Create a credit history
Okay, so funny story. Before, I went to rehab for MoneyI used to keep my money in a safe. True story. You can see, my credit score was terrible as a result. I had to practice the disciplined use of plastic for a few years before it became acceptable. Before I began to think about using a debit or cash card, it was all fine and dandy. Buy a House. It wasn’t easy to get a mortgage because my credit score wasn’t as good as it could have. It’s unfair. It’s the truth.
Maximize Your Cards
The balance should not exceed 20% of your limit. If your limit is $5,000, you shouldn’t spend more than $1,000. The ratio of what you borrow and how much credit you have is a significant factor in your credit score. Your credit score will suffer if a bank believes you owe more money than you can repay.
By the way, paying interest is destructive for the economy, so I recommend you avoid it or use alternative solutions to spend 0% interest.