If your credit score is not as high as you think it could be, but you don’t have any major problems on your credit report, there are a number of strategies that you can employ in order to boost your credit score.
First and foremost, make sure that there aren’t any major issues on your credit report, such as late payments, missed payments, or overdue bills that have gone to collections. If you do have negative collection entries, check out my article on How To Remove Collections From Your Credit Report. Otherwise, improving your score could be a lot quicker and easier than you realize.
One thing that you may need to do is remain patient, especially if you are a young adult without much of a credit history. It takes several years to build up a credit history, so there isn’t much else that you can do to counteract that specific cause of a low credit score. You can, however, make sure that your other factors are in line. In addition, if you have an older card that you are not using, charging something to it once or twice a month can restore it to active status on your credit report.
Paying down your balances may help to boost your score, especially if you are close to your limits on numerous credit cards. While being close to a particular limit will have some impact on your credit score, taking up a high percentage of all of your available credit is even more serious. For example, if you have three credit cards with limits of $1,000, $1,000 and $10,000, and the first two have balances of $900 while the third has no balance, your credit score should be fine. However, if your first two have zero balances and your third has a balance of $9,000, your score could drop. To understand more about credit utilization, check out this article: Utilization: Maintaining The Right Credit Balance to Limit Ratio.
Ideally, you’d like to keep the percentage of debt that you are carrying relative to the size of your available credit at or below 20 percent. That’s not only good for your credit score, it’s also a good idea for your own good. That’s one of the great things about pursuing a better credit score. Doing so can help keep you out of bad financial situations that are going to get you into trouble in the first place.
Now that you have some ideas of what you can do to boost your score, the rest should be pretty easy as long as you stay a bit disciplined.
Author Bio: Ryan Greeley writes about credit and personal finance on The Better Credit Blog.