Your credit score is used to determine more than just if you qualify for a loan. It can determine insurance rates and premiums, your ability to rent a home or apartment, whether you will have down payments to get cable, internet, or phone service, and even if a company will hire you.
Because your credit score can affect many aspects of your life, you must understand how to obtain and maintain a strong credit score. Here are six ways you can improve your credit score.
Pay Bills on Time or Early
Paying your bills on time should be a given for your financial status, but you would be surprised how many don’t realize that some of your payments hit your credit every time they are late. While it is not suggested that you be late on any bill payments, sometimes life is a challenge, and you must shuffle some things around to make ends meet. Make sure you pay those bills affecting your credit on time or before they are late. Work with the creditor on a payment plan that won’t damage your credit.
Experian Boost
Experian, one of the credit bureaus, has begun a program to help anyone who wants to boost their credit. One of the three major credit reporting entities did something brilliant. They allow bills that are typically not considered on your credit that you likely pay on time every month to be considered in your credit score.
You can add your utility and cell phone bills into the mix of payments that will boost your credit if paid on time and see a jump in your credit score by about forty points in 90 days! Hopefully, the other two entities will follow suit as this could change the face of credit if you pay these bills on time but have some credit issues that lowered your score.
Do Not Delay Paying Off Debts
Debt should be the most important concern you have financially outside of necessities. You make a substantial financial mistake if you spend on luxuries while carrying debt. Start with making the most significant payments towards debts with the highest interest rates.
If you have any revolving credit, such as a credit card, do not use it until all debt is paid down, or you will quickly be back in the same boat. You need to stop this debt leak. Do not close unused credit cards, as this adversely affects your credit. Keep them open and pay any fees they have, but don’t spend on them.
Streamline Lines of Credit
Even if you pay every credit card and loan on time, it will still lower your credit score if you have many lines of credit. A potential creditor will not want to see that if you fall upon hard times, their bill will be one among many you will struggle to pay. Paying them on time will help your score, but not enough to overcome the hit your credit took by having too many credit lines.
Applying for Credit
Just because that department store will give you a 20% discount on your current purchase for just applying for their in-store credit card doesn’t mean you should do it. Every single time there is a hard inquiry on your credit score, it lowers it. Simply put, stop doing it. Hit sales or go second-hand shopping to get great deals; don’t apply for every store you shop in’s line of credit.
Dispute All Adverse Items
Many credit checking apps and websites make soft inquiries on your credit score, which doesn’t adversely affect your score even if you check it every day, multiple times a day. You need to check your scores as regularly as possible because if you catch and dispute them immediately, they will be removed if there are any inaccuracies.
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