A good credit score can help you qualify for a variety of benefits, such as low-interest loans and premium rewards credit cards. The process of improving your credit score doesn’t happen overnight, it takes time. You should start by checking your credit score, seeing where you currently stand, and where you need to go from there. Following that first step you can start using these simple ways to increase your credit score.
1. Make Payments On Time
This is one of the easiest and strongest impacts you can have on your credit score. Past payment performance is a good predictor in future performance, which is why most lender review it. You want to pay all your bills on time, not just credit card bills or loans, but also rent, utilities, phone, etc. The best way to keep up to date is by using tools such as automatic payment or calendar reminders. If you’re behind on payments the best thing to do it just start getting up-to-date as soon as possible. Missed payments do have a negative impact on your credit score, but as time goes on old their influence declines over time.
2. Leave Old Debts on Your Report
Most people are impatient to get rid of any traces of debt once it’s paid off, but it may actually help improve your credit score. As long as the payments were made on time and complete, those debt records can be beneficial. Having an account with a long history and solid track record of paying bills on time are what lenders and creditors look for.
3. Avoid Opening New Accounts and High Balances
Some creditors and lenders see opening new accounts as a negative. It may be seen as taking on more debt and that you may have issues paying it off. Keeping your open and active credit and loan accounts to a minimum, it’s much easier to keep your credit score on an upward path. Additionally, many credit reporting firms penalize cardholders with high balances. Ideally, you want to keep your card balance at 30% of your available credit. The best strategy to do this is to pay down credit card debt relentlessly.
4. Dispute Any Inaccuracies on Your Report
Check your credit report through all three bureaus: TransUnion, Equifax, and Experian. Incorrect information will drag down your score. Verify that the information is correct, and if there are any errors, get them corrected immediately.
Our last tip is to be patient. Your score can’t rise overnight. The best way to improve your score is by having good long-term credit habits. You can also monitor your score by having soft inquiries pulled, which doesn’t impact your score the way hard inquiries do.
More From TLC
Although having a good credit score is one of the best ways to get approved for a loan, it isn’t always make or break. TLC considers all loan applicants, so never hesitate to apply. You can learn more about bad credit loans with TLC here and here. To learn more about our rates and terms click here, or if you’re ready to apply, click here!