You might be surprised but it doesn’t take rocket science to improve your credit score. Just because your credit looks a bit shabby doesn’t mean that you can’t do anything to improve it and make your lender see your worthiness. Here are some of the best ways to make your score better than ever before.
Reduce Your Credit Ratio
The process of credit scoring looks into the ratio of your debt side by side the total amount of your available credit. You can add up the credit limits you have to know exactly where you stand. The long term goal here is to eliminate all your debt although a good target for the meantime is to reduce your ratio to lower than 50%. After that, you can go for 40, 30, and so on.
Be Right on Time
Prior to worrying about having to clean up after the mess that happened yesterday, you can make things right today by focusing in your existing performance in paying your bills. Pay right on time then pay more than the needed minimum payment every month on the outstanding credit balances.
Pay Off But Don’t Close a Card
With the credit ratios mentioned above, lowering your available credit can hurt your score. When one of your cards has a balance of $3,000 with a maximum of $5,000, and another card with a maximum of $10,000 doesn’t have a balance, closing your unused card can suddenly make your credit ratio shoot from a benign 20% to a worrisome 60%. Resist the temptation of closing an account when you have paid this off, and instead, just lock your card in your drawer.
Stay Current on Outstanding Debts
Are collection agencies staying on your trail? Make sure you pay off late accounts. However, keep in mind that paying off your delinquent account will not remove it from your credit history. You just need to wait. You will be better off when the delinquency further recedes to the past. If you do have a plausible explanation as to why you fell behind, your lender might be sympathetic if you managed to pay off your debt.
Keep Your Hands Tied from Getting New Cards
Avoid opening new accounts just to improve your existing credit. This particular method will not really do anything to make your score, and instead, it can end up hurting it. If you want to get a new card, you can apply for just one but refrain from opening several accounts simultaneously. Your lender will see it as a risky behavior.
Inspect Your Credit Report Closely and Carefully
It is very common for credit reports to have some score-dinging mistakes. Make sure you check yours and watch out for any obvious mistakes such as erroneous balances or unrecognized accounts that may indicate identity theft. See to it that lenders reported your credit limits properly since these can affect your credit ratio as well.
Give things time, and follow these tips to improve your credit score.