Don’t wait until you’re ready to buy a home, a new car, or anything else you’ve been dreaming about to try and improve your credit score. There’s no better time than the present to start making changes that will positively impact your future. A respectable credit score is a must-have if you want creditors to trust your ability to make sound financial decisions. If you’re ready to get your credit back on track and improve your overall financial health, you’ve come to the right place. Here are some tried and true ways to raise your credit score 100 points or more.
Make Payments on Time
One of the best ways to improve your credit score is to pay your bills on time, every time. The consequences of missing payments or paying late not only include high fees and increased interest charges–your credit score will go down as well. If you struggle to make payments on time, use a calendar to help you remember which bill is due when–and make a habit of glancing at it daily. Being prompt when it comes to making credit card and loan payments will help you earn back the points that you’ve lost–one payment at a time.
Strive to Lower Your Balances
High credit card balances are frowned upon by creditors, so set some goals for yourself to help you pay them down. Even if you don’t go over your credit limit, a maxed-out account will mar your credit report. Strive to lower your balances by making more than the minimum payments and using your credit cards for emergencies only. If you can’t afford to pay cash for an item or you know right off the bat that you won’t be able to pay off your credit card balance at the end of the month, avoid making purchases and instead put your money towards paying off credit card and loan debts. The amount of debt you have is taken into heavy consideration when you apply for credit, so show those creditors that you can manage your accounts responsibly.
Have a Variety of Accounts
While credit is credit, it’s always a good idea to have a variety of accounts in your credit profile’s history. Installment loans such as home loans, car loans, student loans, and business loans are great additions to your financial profile, providing you don’t default on them. Credit card activity can also be an asset to your credit history–just make sure that you only carry a few cards, that you make your payments on time, and that you keep the balances as low as you possibly can.
Check for Errors on Your Credit Report
If it’s been quite a while since you last reviewed your credit report, it’s time to check it out and verify its accuracy. Everyone is entitled to one free credit report per year from each of the three reporting credit bureaus–so obtain copies and review them carefully. If you find an error, take action immediately by filing a dispute. The sooner you clear up any errors on your credit report, the sooner you’ll see your credit score improve.
Keep All Accounts Open
Just because one of your accounts is inactive doesn’t mean you should close it. In fact, closing accounts once they’re paid off will actually hurt your credit score rather than help it. Having you available credit doesn’t mean you have to use it–and potential creditors will take notice of your self-control and responsible behavior if you are able to maintain multiple accounts without necessarily using them.
Make Good on Collection Debts
Even though accounts that have been sent to collections will stay on your credit report for seven years, attempts to reconcile them will be rewarded with an improved credit score. If you have outstanding collection debts, make it a priority to pay them off in full. It’s better to take care of collections sooner rather than later–and as soon as you make good on them, you’ll be closer to the information disappearing from your credit report forever. Seven years may be a long time to wait–but you’ll notice an improved credit score in spite of the bad mark simply by paying them off.
If you want your credit score to improve 100 points or more, expect that it will take some time to right some of your financial wrong-doings. By putting the advice featured here into regular practice, you’ll be able to improve your score dramatically–opening you up to more financial opportunities that wouldn’t otherwise be options for you.
Guest post from Mickey Scott. Mickey writes for CreditReport.org.