7 things that will help you increase your credit score
If you’re looking to improve your credit score, there are a few key things you can do. In this blog post, we’ll share six tips that can help you raise your credit score quickly and effectively. Whether you’re just starting out or you’ve been trying to improve your credit for a while, these tips can give you the boost you need. Let’s get started!
Use a credit-building app
If you want to increase your credit score, something as seemingly small as a credit-building app can make a huge difference. Having an app that organizes your accounts and payments into one place can help you stay on top of any debt you might have. Credit-building apps will also track spending habits and alert you if you’re overspending or hitting credit limits. With this added layer of protection, you can feel empowered to tackle any financial goals while avoiding the dreaded late payment fees.
Credit-building apps can give those with low credit scores a second chance – and progress toward a better financial future. By using apps that help build credit, you can make sure to stay on top of all your accounts and payments. This can help you improve your credit score over time.
Pay your bills on time
Paying your bills on time, every time, is a great way to start boosting your credit score – and it’s simpler than you think. All it takes is a few seconds to check your account balances or set up automatic payments to make sure you’re on track for staying on top of all your debts. Taking the time to avoid late fees and penalties can make a significant difference in improving your overall financial health, as well as potentially helping you get access to better interest rates down the line. Don’t delay – make sure paying bills on time is part of your regular routine. If you’re having trouble managing your bills, speak with a financial advisor or look into budgeting tools. This way, you can keep your financial commitments in check and maximize your credit score.
Avoid taking on new debt
It’s important to be mindful of the type of debt you take on and how much debt you commit to. Taking on more debt than you can handle can be a dangerous game that will ultimately put your credit score at risk. If possible, try to avoid taking on new debt whenever you can. That includes using credit cards, taking out a loan, or signing up for any kind of financing option that requires you to make regular payments. Instead, focus on paying off your existing debt as quickly and efficiently as possible to reduce the amount of money owed over time and help improve your credit score.
Keep your balances low
When it comes to improving your credit score, one key rule is to keep your balances low on any existing credit cards. Paying off more than 30 percent of the total balance is ideal; anything more and you may be incurring excess fees or missing some great rewards opportunities! Remember, having a high debt-to-credit ratio not only affects your credit score negatively but could also result in late payments which can chip away at your score. Furthermore, you might have difficulty getting approved for bigger purchases like homes and cars if your debt-to-credit ratio is too high. So make sure to watch those balances and don’t let them get too close to maxing out — it will be worth it in the long run.
Use a mix of different types of credit
Increasing your credit score is critical for gaining financial freedom and stability. One factor to consider when attempting to increase the rating is a mix of different types of credit. Not only does adding various types of debt demonstrate that you’re able to responsibly manage multiple lines of borrowing, but it also helps create a better “credit utilization” ratio during reviews from lenders. Loans, installment plans, and revolving accounts such as credit cards are all useful additions, so long as they are managed properly. Keep in mind that taking on too much debt can backfire and reduce your score, so make sure only to add types of credit that make sense given your financial situation and lifestyle.
Don’t open too many new accounts at once
When it comes to managing your credit, one of the most important tips you will hear is to be wary of opening too many new accounts at once. Not only does this hinder your ability to keep track of your spending, but it also negatively impacts your credit score. Having too many freshly opened accounts can signal a risk in lending to you and thus, lower your score. To maximize the long-term health of your credit scores, consider limiting yourself to only one new account every two years or so. That way, you’ll be able to show lenders a healthy amount of borrowing activity that won’t damage your score.
Keep old accounts open and active
When it comes to making sure your credit score stays strong, one of the best ways to do it is to keep any old accounts open and active. The more time those accounts have been in good standing, the better your rating will be from potential lenders who consider the length of your credit history when deciding whether or not to extend you new credit opportunities. Likewise, having less balance overall on all active lines of credit can lead to a higher score in a shorter amount of time as well.
Keeping a mix of different types of available lines of credit – such as mortgages, auto loans, and revolving accounts like a credit card – in good standing is also beneficial for raising your score over time. No matter what method you choose, keeping old accounts open and active will go far in giving you the healthy credit score you need now and in the future.
Improving your credit score is no easy feat. It takes time, energy, and dedication to get it where you want it to be. With a bit of smart planning and the right strategy, however, you’ll be able to reach financial freedom in no time! Just remember: pay off your debt quickly and efficiently, keep your balances low, use a mix of different types of credit, don’t open too many new accounts at once, and keep old accounts open and active. If you do all this, you’ll be well on your way to achieving the high credit score you deserve.