How to Increase Your Credit Score

To increase your credit score, first focus on where it stands right now. What factors are contributing to your lower score? This could be a large amount of debt, missing payments, late payments or inexperience. The fact is, to increase your credit score you must work to improve your credit usage habits. This is by far the best possible way for you to see results.  Understand what you are doing wrong and then work to improve it. The following are the most common ways people struggle with credit.

Making Payments On Time

Missing or late payments are one of the worst problems for those with a low credit score. This impacts your credit score significantly and can lead to a drop nearly immediately. To avoid this, make your payments on time or early. Avoid missing any payments at all. This will take some time to overcome, but with regular, on time payments, your credit score will rise.

Use Credit

If you have no credit history, or a very poor level of it, you need to use credit wisely. If you have a secured loan, such as a mortgage or car loan, make those payments on time. If not, get this type of loan. You may need to find a secured credit card that reports to the credit bureaus. Another option is to work with your current lenders to extend the terms of your loans so that any debts you do have are in good standing. Using credit wisely is a good step in the right direction.

Don't Overuse Credit

If you are relying on credit cards to pay your bills, this is a sign of a financial problem. In short, you need to pay down the amount of debt you have to widen the gap between what you owe and what your line of credit is. This increases your debt to limit ratio, which will increase your credit score. Additionally, avoid taking on more credit cards if you already have them. You should not open more than one credit card every few months. Otherwise, you may look desperate for money.

Work on making your payments on time and be sure that you focus on using credit within your budget. Pay off your debts in full each month. Do not open new accounts if you are struggling with old ones. Doing these things will help to increase your credit score significantly, but the process does take time.

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Created on Dec 31st 1969 18:00. Viewed 0 times.

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