Improving your credit score is not going to be instantaneous. It is going to take time. Your credit rating considers your past behavior and could include information from a couple of years ago.
If you have decided to embark on the journey of improving your credit score, there are a couple of things that you can do.
- Consider the credit card balance
One piece of information that affects your credit rating is the ratio between your revolving credit and how much of it you are actually using.
To bring up your credit score, minimize the balances by paying them and ensure they remain low. But what if you have multiple credit cards?
Well, you can consolidate these into a single card to make them easier to pay down.
- Get rid of credit card balances.
Even before you consolidate your credit cards there is still something you can do to bring up your credit score with your multiple credit cards. Start off by paying the small balances.
To make things easier for you, take the credit cards with the least balance and clear this. Then move on to the next. Soon you might find that the majority of your credit card balances are paid.
Then stop using these credit cards and work with one or two main credit cards.
- Don’t remove an old good debt from your report
Many people will quickly call the credit report office trying to get a debt that they have cleared to be removed from their report.
It is understandable that you don’t want any bad report in your credit history, however, an old debt that you cleared can show that you are capable of clearing your debts and will be a positive mark on your report.
Let those old debts that you cleared remain on your report.
- Do your rate shopping
If you want to apply for credit especially for a student loan, a home loan or a car loan, it’s important to start off by doing a rate shopping.
Whenever you take a loan, your credit score dips, if just a little and this reduction in your credit rating could stay in your report for over a year. The reason for this is that normally, if you took multiple loans, it would be because you want more credit.
With mortgage, student loans and car loans, you can still make multiple applications but only end up taking one loan.
The fico score, which is often used by lenders will disregard any inquiries that you’ve made 30 days before you score.
- Don’t pass the deadline when paying your bills
You might be planning to buy something such as a car or a house and you’ve been saving for just this. However, ensure that your bills are paid on time as this has a significant effect on your credit rating.
Remember that what your credit report says about you determines your credit score. If you fail to pay your bills on time, this will show in your credit report which in turn will negatively affect your credit score.