When you are looking at your finances you will find that one of the most important things you can have is a good credit score. If your credit score is not the best you should make a goal to yourself to improve your score throughout the year. One thing that people do not understand is that it will take some time to improve your score. It will take longer than just a few days to do this but it might be easier than you think. Here are a few easy ways to improve your credit score.
Reduce The Amount Of Credit You Use
If you have credit cards you will have the temptation to use it even when you know you should not. Some people do all of their spending on credit cards and will then complaining because they are drowning in credit card debt. Therefore a good tip to improve your credit score is to reduce the amount of credit you use. This is called lowering your credit utilization ratio. The lower the ratio is the higher your credit score will be.
Increase The Amount Of Available Credit You Have
If your credit utilization ratio is high and you do not have the funds to pay down your credit cards you still have the opportunity to improve your credit score. You can do this by calling the credit card companies and ask for a credit limit increase. It is possible that the credit card company will give you the increase and the amount of available credit you have will then be increased. Of course you should use restraint and not spend that additional money.
Pay Your Bills On Time
People do not often realize how not paying your bills on time affects your credit score. In reality your payment history makes up about thirty five percent of your credit score. That being said if you want to improve your credit score during this year you need to be sure that you pay each of your bills on time every month. If you are a person who forgets about their bill due dates you should set up reminders and email alerts to be sure that you do not miss a due date.
Pay Off A Loan
One of the best ways to improve your credit score is to pay off a loan. This can be a personal loan auto loan or even a student loan. Any of these will improve the credit score. Having any loan paid in full shows that you are good at managing your credit.
Avoid Opening Any New Accounts
Believe it or not if you open too many new accounts within a short amount of time you could be hurting your credit score. It will also give you more credit to spend and that will also lower your credit score. Many creditors do not realize that for each credit inquiry you have on your credit report your credit score will lower. This is why it is a good idea not to apply for credit at many different places at one time. It might make it look like you are desperate for credit. Not only will your application not be approved but also your credit score will dramatically change.
Monitor Your Credit Report
Another way to improve your credit score is to monitor your credit and report anything that does not belong to you. After all mistakes happen and no one wants a low credit score because of a mistake.
Improve your credit score is something that can be done easily but will take plenty of time to do it. With some hard work and patience you will find that your credit score will increase and you will be on the road to credit success.
Image credits to : GotCredit