Having a low credit score can negatively impact many aspects of your life, from employment opportunities to finding a nice place to live.
If your credit score is lower than you’d like it to be, here’s how you can improve it.
5 Ways To Improve Your Credit Score
#1. Set Reminders So You Don’t Miss a Payment
Putting reminders on your mobile phone’s calendar app is an easy way to keep track of upcoming bills. You can also use a calendar program on your computer.
Or, if you would prefer not to rely on technology, you can write your reminders down in a planner that you keep in a safe place.
Ensuring that you are punctual with your bill payments can improve your credit score in a matter of months.
#2. Manage Your Loans
Managing your current loans and paying them off responsibly will increase your credit score over time.
Applying for an installment loan can improve your credit history by expanding your credit mix, which makes up to 10% of your score.
However, this loan must be paid off in one payment. Failing to do so will negatively affect your credit score.
There are many companies that specialize in installment loans. Research the ones you may want to use and view their online rating.
For example, if you were interested in the installment loan company, MaxLend, simply type, “MaxLend reviews,” into your preferred search engine.
#3. Only Open New Accounts When Absolutely Necessary
Submitting an application for an additional line of credit will result in a hard inquiry, which can cause a slight dip in your credit score.
And while one hard inquiry isn’t going to hurt your credit score in the long term, multiple inquiries will.
Opening a new account can also harm your score by shortening the average lifespan of all your accounts.
For these reasons, you should apply for new accounts frugally and allow your score to recover between account openings.
#4. Keep Your Credit Balance Low or Pay it Down
A high credit balance that is approaching its limit can damage your credit score regardless of whether or not you pay your bills on time.
This is because maintaining a high balance increases your credit utilization ratio, which should not amount to more than 30%.
If you have a credit card with a high balance, pay it down and, if possible, pay it off.
If more than one credit card needs to be addressed, select the account that is closest to its credit limit and pay it off first. Then work your way down.
#5. Don’t Try To Take Shortcuts
Steer clear of businesses that claim to improve your credit score for you.
You can do this on your own with some planning and a little extra research, and there is nothing more that these companies can offer you.
You should also watch out for companies that specialize in debt resettlement because the solutions they offer can prove risky for your score.
Increasing your credit score is a gradual process and there is no quick fix. Following these tips with patience and dedication will guarantee a better score in the future.
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