No matter how careful you are with your money, sometimes life happens, and you find yourself in financial distress. If this happens to you, one of the first things that you might be worried about is whether or not your bad credit history will prevent you from receiving financing in the future. Luckily, there are steps that you can take to boost your credit score by paying off old debts and opening new lines of credit. This guide will help you understand what exactly your credit score is and how to improve it so that you can get the financing that you need.
Have more than one card
One way to boost your credit score is by having more than one card. If you have access to a credit card or line of credit, it’s best if you have at least two cards with different institutions. By having multiple lines of credit, you spread out your debt and make it less likely that anyone creditor will hold a large portion of your financial obligation. This also allows you to have some flexibility should one institution raise its interest rates or decrease its limit; you can use another card while working with that lender on a new agreement.
Pay your balance in full
Paying your balance in full every month is a great way to boost your credit score, but it’s not a magic bullet. There are other ways you can increase your score, such as by applying for new credit wisely or keeping old accounts open. However, there are just as many ways you can hurt your score—including paying late on an old account. And if you have too much debt compared with your income, that’s also going to hurt you. If you want to know what steps will help boost your credit score, call us at _____ and ask about our free monthly report: How To Boost Your Credit Score Fast. It includes all of these tips and more!
Open a new account when you need it
If you want to boost your credit score, one thing you shouldn’t do is open up new accounts. Every time you apply for a loan or credit card, that inquiry lowers your score—even if you don’t get approved for a new account. Instead of applying for several different cards at once, it might be wiser to plan out when you need each card and then open them in quick succession. That way, no single inquiry will have as much of an impact on your credit score. The last thing to remember when boosting your credit score is to always pay off what you owe. Carrying balances from month to month (or even worse, maxing out multiple cards) leaves a lot of room for error; you never know how many inquiries could pile up before your next statement comes in!
Check your credit report every year
As you’re building your credit, you must check your credit report at least once a year. Although many people are protected by federal law from having their credit scores changed without notice, that doesn’t mean there isn’t some information on your credit report that can change unexpectedly. Checking your report regularly can alert you to these changes and allow you time to address any errors or discrepancies before they have a significant impact on your score. Checking your report annually is also important if you are responsible for other people’s finances (such as employees or spouses).
If someone else has a bad credit score because of something in their past, being able to identify mistakes will help protect them from further damage. Make sure you know where your income comes from: It might seem obvious, but one easy way to boost your credit score is knowing where exactly all of your income comes from each month.