Whether it’s a student loan, mortgage, or a new credit card, all lenders look at one’s credit score before approving or denying a request. In case your credit score isn’t where you want it, here are some great tips to improve any credit score!
Take Care of Your Bills
Part of becoming an adult is learning to pay your bills fully and, most importantly, on time. This becomes even more important when you start to care about your credit score. It’s best to learn early that taking letting bills slide by will negatively affect one’s credit score.
That means rent too! Not many know this, but paying rent on time also affects one’s credit score. It is a bill, after all! Getting into a good rhythm with bills and rent will help boost a credit score in no time. And why not? You need to pay them anyway!
Look into the Credit Utilization Rate
Let’s face it; tons of things can negatively impact your credit score. However, one thing many don’t know about is their “credit utilization rate.” This number, a percentage, represents how much of one’s available credit they use. And, the higher the percentage, the more the credit score will suffer.
“People who have the highest average FICO scores have a utilization of 7 percent. I always default to 10 percent because that’s going to keep you in the good zone for both of the scoring platforms,” says credit expert John Ulzheimer. So, be sure to keep an eye on how much of your credit you use, trying to limit it to 15 percent, or less.
Don’t Wipe Paid Debt Away
Old, paid-off credit card accounts can look annoying and ugly on your credit history report. However, you should feel good about finally paying them off. Furthermore, even though it might be tempting to wipe the old accounts from your record after they’re paid, resist the urge! It’s much better to keep them on if they were paid accordingly. The positive, paid record counts towards your credit score, showing potential creditors that you pay off your debts!
Previously, when someone wanted to boost their credit score, they needed to work hard doing everything listed above, and more. Today, there’s plenty of technology that can help with your raising goals! Apps like the Experian and Equifax apps not only help users track their credit scores, but also have tips, tricks, and alerts to help them get on track. Users can also connect bank, utility payment, and other types of accounts to the app, producing even better tips and tracking.
Apply Carefully (And Intelligently)
In case you didn’t know, a “hard inquiry” is one of the worst things that can happen to a credit score. That’s when a lender makes a serious review of one’s credit in response to an application. It can lower a score by up to 15 points for up to 12 months and will remain on your record for up to two years! So, be careful when applying for a credit card or loan.
When applying, take a look at the terms and requirements, making sure you meet them. If you can’t, that’ll result in a quick denial, which is even worse. Also, make sure to not to apply to too many in a short time.
It doesn’t matter if you already have a credit card or want to better your score before applying, it’s not hard with a little determination and patience. Most importantly, don’t hesitate to contact a professional financial advisor with any questions!