A bump in your credit score can save you hundreds or even thousand of dollars both in the short-term and long-term by helping you qualify for lower interest rates on loans and mortgages.
It doesn’t matter if you’re massively in debt or if you’ve plateaued and don’t know how to increase your credit score anymore. Here are a few simple and effective ways to improve your credit score.
Check Your Credit Report for Errors & Resolve Those Errors ASAP
A single mistake on your credit report could be hurting your credit score, and you may not even know it. If you haven’t checked your credit report in a while, take a moment to scan your history for any accounts you may have closed or any lines of credit that you don’t recognize. If you do see a mistake on your credit report, contact both the credit reporting company and the source of the mistake right away.
Open Up a Secured Credit Card
If you have a relatively short credit history, opening up a secured credit card can be a safe, easy way to increase your credit score. A secured credit card is easier to get than a typical credit card. All you have to do is make a deposit of usually a few hundred dollars at your bank or credit card company and they will issue you a secured credit card with a credit limit that’s usually equal to your deposit. Even though this may seem like a debit card, secured credit card activity is reported to the credit bureaus, which means using the card responsibly could boost your score.
Use Less than 30% of Your Maximum Available Balance
One factor that impacts your credit score is called your debt-to-credit ratio. If you have a credit card limit of $1,000 and you have $500 in debt on that card, for example, you would have a 50% debt-to-credit ratio. Try to keep the balance of your card below 30% of your available credit to help maximize your credit score. The ideal, of course, is to pay off the balance on your credit card every month and don’t allow balances to accrue.
Keep Up Your Responsible Credit Card Habits
Once you’ve taken the steps above to improve your credit score, keep it as high as possible by paying your bills on time, not maxing out your credit and keeping tabs on your credit report.
