When you are in credit repair mode, you want to know one thing: what you can do to raise your credit score. Here are some things you can do to boost your credit score. At the same time, make sure to avoid those factors that could jeopardize the progress you have made.
1. Have Open and Active Accounts in Good Standing
Your credit score is a measure of how you have managed credit accounts in the past. You will not get a good credit score if you have no accounts or if all the accounts you have are closed or overdue on payments.
2. Pay All Bills on Time
The biggest thing that affects your credit score is your payment history. The more on-time payments you add to your credit history, the higher your credit score will be. Even one late payment can indicate that you haven’t changed your bad credit habits, so make sure to pay on time every time.
3. Do Not Let Your Accounts Go to Collections
A collection account is one of the most serious types of delinquencies that can occur. Since any account – even a small library fine or your child’s cafeteria charge – has the potential to reach your credit report, it’s important to pay all of your debts or at least make payment arrangements with the creditor.
4. Reduce Your Balances and Keep Them Low
The amount of debt you carry is another factor that significantly affects your credit score. Low balances are better for your credit score, so if you have large balances, pay them down. The ideal credit utilization rate is less than 30% across all available credit and any individual credit card. The lower the ratio, the better. Aim to get to this point or lower.
5. Ensure Your Credit Limits Are Reported Accurately
It’s not just the amount of debt you carry that affects your credit score, but the ratio of your credit card debt to the limits on those cards as well. If your credit limits are not reported correctly, it may appear that you have maxed out your credit card. You can dispute inaccurate credit limits with the credit bureau or contact the creditor to find out why your credit limits are not reported accurately.
6. Keep Old Accounts Open and Active
The age of your credit is important when it comes to your credit score. Your credit score considers both the age of your oldest account and the average age of all your accounts. Keeping old accounts active helps you achieve a mature credit age.
7. Open New Accounts, But Cautiously
When you open a new account, it lowers your average credit age, and the additional inquiry can affect your credit report as well. Of course, you can’t avoid opening new accounts altogether. In fact, this is a necessary step if you are rebuilding damaged credit. Open accounts as needed.
8. Have Different Types of Accounts
Your credit score improves when you have experience with different types of credit accounts. This means having both credit cards and installment loans, especially a mortgage, in your credit history. You don’t necessarily have to take on new accounts, especially large loans you cannot afford, for the purpose of boosting your credit score. Instead, open accounts as needed, but be wise about the types of accounts you open.
Eliminating Negative Information
Removing negative information from your credit report can boost your credit score, but wiping items from your credit report is not easy. You can dispute negative entries that are not accurate, wait until the reporting time limit on the credit report ends (usually seven years), or attempt to persuade the information provider to remove the entry from your credit report using a pay-for-delete or goodwill offer.
10. Canceling Excess Cards
If a person has multiple cards, they may consider canceling one or two that have been open for less time. This will help increase the average credit age and raise the person’s credit score. Please be cautious of the impact of credit utilization ratio, as closing a credit card could inadvertently increase this ratio.
Source: https://www.thebalancemoney.com/things-that-boost-credit-score-960381
Leave a Reply