Payment History
To improve your credit score, the first thing to consider is your payment history. To have a good payment history, you need to make your payments on time. Even if you can’t pay the whole debt, make at least the minimum payment. If you think you’ll have trouble paying a particular bill, contact the creditor right away to make paying arrangements with him.
Limit Credit Checks
Apply for credit only if you need it, and try to limit the number of times you do so. If there are too many credit checks on your report, it might lead lenders to think that you are living beyond your means or that you are in urgent need of money, which is not good for your credit score. Credit card applications will lower your credit score. Keep in mind that requesting to see your own credit report does not affect your score.
Don’t Use All Your Available Credit
Even if you have a credit limit of $10,000, do not use it all. If your loans and credit cards are all maxed out, potential lenders will consider you as a higher risk. Try and limit yourself to 35% of your max limit. To continue with our example, if you have a $10,000 credit limit, try not to use more than 35% of that limit, which comes up to $3,500. Even if you pay your full balance in time, using a lot of your credit will make you a liability.
Mix Credit Types
Having just one type of credit type, like a credit card, can lower your credit score. Try to mix different kinds of credit, like a line of credit, a credit card or a car loan. Just make sure you can make the payments, or else you will only manage to lower your credit score.
Keep Old Accounts Open
Even if you don’t need it, keep an old credit account open if you have no fees attached to it. Use it once in a while to keep it active. The longer your account is open, the better it is for your credit score, and relatively new credit accounts may lower your score.
Fix The Unexpected
What to do if you’re building up your credit score but are not quite there yet and need money quickly for an unexpected expense? An online personal loan could help you out. They are easy to get. Apply for the loan online, and the money can be deposited in your account within twenty-four hours. You can then repay the loan within three months with easy payments that fit well in a budget.
Your credit score plays a significant role in your life, so improving it should be a priority.