How To Improve Your Credit Score In 5 Easy Steps

Did you know a surprising amount of Americans don’t know their credit score? Credit scores are critical for getting a mortgage or car. If you want to learn how to improve your credit, we can help.

In this guide, we’ll go over ways you can improve your credit score today.

Want to learn more? Keep reading.

Table of Contents

1. Pay Your Credit Card Balance

You should use lower than 30 percent of your credit card limit. It would help if you didn’t use a lot on your credit card. High credit score people will tend to use less than seven percent of their limit.

Keep your balance low. Pay down the balance before your billing cycle ends. You can also make sure you pay a few times during the month, so you keep the balance low.

2. Get a Higher Credit Limit

Increase your credit limit as well. When the credit limit increases and your balance remains, you’ll lower credit utilization.

This will end up improving your credit. You can get a higher limit if your income increases or you add years of positive credit experience.

Call your credit card issuer. You can ask about getting a higher limit. See if you can avoid a hard credit inquiry. Any hard credit inquiry will lower your score by a few points.

After the higher limit gets reported, it will lower your credit utilization. Make sure you don’t use the extra space on your card.

3. You Should Become an Authorized User

Does your friend or relative have a credit card account with an excellent credit limit? You could ask to get added as an authorized user.

This will add the account to your credit report. Its credit limit will end up helping your utilization. You can benefit from their positive payment history.

The account holder doesn’t need to let you use their card or even give you their account number.

The account should report to the credit bureaus like Experian, Equifax, and TransUnion. This way, you can get the best credit score effect.

If you are new to credit, you could get some help from someone with established credit. You can offset the different missteps. Talk to the account holder you’re asking the favor from.

Agree whether you will be able to access the account or the card, or if you will only get listed as an authorized user.

4. Make Your Payments on Time

You will end up ruining your credit if you don’t pay your bills on time. Late payments stay on your credit report for up to almost eight years. If you missed a payment by 30 days, you should call the creditor right away.

Ask the creditor if they will report the missed payment to the bureau. You could pay right away and ask them not to make the report. If the account gets marked as delinquent, it will affect your score.

Paying bills is one of the main scoring factors with FICO credit scoring systems. You should use a schedule, calendar, or reminders on your phone. This way, you won’t end up missing any bill payments.

Make sure you pay the bill right away if you notice you’re late. You don’t want it to remain a delinquent payment for an extended period.

5. What About Credit Report Errors?

Mistakes on your credit report will end up affecting your score, and you should fix the errors and improve your credit score right away.

You can get a free report from the three major credit bureaus. You should check the reports for any mistakes.

Sometimes, payments can get mistakenly marked as late even when you paid on time. Make sure you report the errors if you notice this issue.

You should dispute the errors. Make sure you request the credit report and file a dispute about a mistake. You should follow up and make certain things get dealt with by the proper professionals.

Keep doing all these things, and you will notice your credit will improve over time. You should make sure you check your report often.

If you need legal help, consider hiring an attorney. Check out https://financialjusticenow.com/.

Maintain Healthy Credit

After you have fixed your credit, you should work hard to maintain your decent score. Keep your credit status strong. You will have different opportunities for lower interest rates or credit card approvals.

You should also try and limit the number of hard inquiries. A soft inquiry won’t end up affecting your credit. Hard inquiries, however, will affect your score.

If there are many hard inquiries in a short period, you will seem riskier. Your credit score will be affected.

Try to set up auto-payments. No matter if you’re paying the full balance or a small amount, you should make your payments on time. With auto-payments, you won’t need to worry anymore.

If you don’t use older credit cards often, you should still keep the account open. An older account will reveal you kept a healthy payment history. Creditors will see you as more trustworthy.

Maintain healthy credit maintenance. This way, you won’t end up with poor credit again. Make sure you pay bills on time and do not use a lot of your credit limit.