5 Simple Ways to Improve Credit Scores
Having a strong credit score is an important part of making large purchases from certain companies. If you do not have a good credit score, you may not be allowed to buy certain types of houses or cars. In addition, having poor credit may have a strong impact on you if you are trying to start your own business. If you need help improving your credit score, there are a few easy tactics you can try.
Look Over Your Credit Report
One of the easiest things you can do to improve your credit score is to review your credit report. Every person gets three credit reports, one from each of the three credit bureaus in the United States: Experian, Equifax, and TransUnion. You are allowed to get a free copy of each report once a year, so you should take the time to look each one over to make sure everything is in check.
Credit reports are not always perfect, and every once in a while you may find mistakes on them. Any mistakes found on your credit report reflect your credit score’s standing, so if you find problems, you need to report them as quickly as possible. Fixing these mistakes can help give your credit score a strong boost, so make sure to review your credit reports if you have not done so.
Keep Up with Smaller Balances
The main way you can maintain a strong credit score is to pay off the balances on your credit cards. Many people have multiple credit cards, and are used to buying things from different establishments. Having too many credit cards open at once can be somewhat problematic, since you will have more balances to keep track of. If you have too many unpaid balances in your credit report, your score will take a hit, even if these balances are small.
To improve your credit score, you should go through all of your credit cards to see which ones have small balances that you need to pay. Pay off these small balances first so you don’t have to worry about them later down the road. Your credit score will be a lot stronger if you don’t have a lot of small balances piling up in your credit report.
Use Reminders to Avoid Late Payments
The most important part of maintaining a strong credit score involves making payments on time. Failing to pay your credit card balances on time can seriously damage your credit score, so you need to make sure you don’t forget about payment dates. If you are having trouble remembering when you need to make payments, you should put together a system that can remind you when a payment date is coming up.
Depending on the bank you work with, you may be able to receive payment reminders through your email. If you carry a planner with you, you should write a note for payment day so you know when it’s coming up. Always remember to pay your balances on time so you keep your credit score up at all times.
Request a Credit Limit Increase
Do you have a good standing with the company that issued your credit card? If you do, you should consider asking for an increase on your credit limit, since this is another way you can improve your credit score. One of the biggest factors in your credit report is your credit utilization ratio, which represents the amount of available credit you are using. Keeping this ratio low is an important part of keeping a strong credit score.
By increasing your credit limit you are increasing the amount of available credit you have, which helps lower the credit utilization ratio. If you have been keeping up with your payments for a long period of time, your credit card provider should have no issues increasing your limit. Keep in mind that this is not an excuse to go crazy shopping, because if you waste all your extra credit as soon as you get it, your ratio will increase.
Apply to be an Authorized User
Do you think that you could be trusted looking after a close friend’s money? If you think you can handle this, you might want to think about becoming an authorized user for a credit card owned by someone close to you. When you are an authorized user on someone else’s card, that person’s account will appear on your credit report. If the quality of this account is strong, this can benefit your credit score greatly.
One of the best parts about this method is that you don’t even have to use your friend’s card to reap the benefits. The key to making this work is that you must partner with someone who is good with money, or else your credit score may actually suffer. As long as your partner has a good standing with his or her balances, you should see a strong credit score in no time at all.