Knowing how to get a better credit score and taking steps to improve it can help open up more financial opportunities in the future. Discover five simple steps you can take to quickly boost your rating, from monitoring your activity and paying off debt to disputing errors on your report.
1: Check Your Credit Report and Dispute Errors.
One of the first things you should do to improve your credit score is to check your credit report, which you can do for online. Make sure that all the information listed on it is up-to-date and accurate and look out for any errors or omissions. If you find something amiss, contact the issuing agency and explain why you think it’s wrong and how it should be changed, if they agree with you, they’ll amend the report immediately.
2: Keep Balances Low on Credit Cards and Other Revolving Credit.
Paying the full balance each month on any credit cards and other revolving credit you have is one of the best things you can do to keep your credit rating in good shape. It’s also a great way to avoid being charged interest. A key factor in calculating a person’s credit score is their debt-to-credit ratio, or how much they use relative to how much available credit they have. Aim for keeping all balances below of their respective limits.
3: Pay Your Bills on Time and Don’t Skip Any Payments.
Paying all your bills on time can help you improve your credit score. A good credit rating is based on a history of punctual payments, and late or missed payments can damage any progress you’ve made. Set up automated payments if necessary to make sure that you never miss a payment and always pay in full and on time. This will demonstrate to creditors that you can effectively manage credit responsibly.
4: Pay Off Debt Instead of Moving It Around.
Although having multiple payment accounts can help you with budgeting and managing your debt, having too many of them can hurt your credit score. It’s best to pay off your balances as soon as possible and not move the debt from account to account. Your credit score will suffer if you close one account but open up another with the same balance. Pay it off first before opening up a new line of credit.
5: Reduce the Amount of Debt You Owe
One of the best ways to improve your credit score is to reduce the amount of debt you owe. Consider consolidating high-interest credit cards and loans, if possible, which may help combine multiple payments into one. You can also negotiate with your creditors for lower interest rates and payment plans that work for you. Make sure to get any agreements in writing so that you can refer back to them.
