10 Ways to Improve Your Credit Score

Your credit score is a crucial component and indicator of your financial health. When you apply for a large loan, like a mortgage or an auto loan, or for a new line of credit, lenders look at your credit score to help determine whether you can afford it.

There are no tricks or quick fixes to getting a good score. However, you can raise your score over time by demonstrating that you consistently manage your credit responsibly.

Here are 10 ways to improve your credit score

    1. Pay your bills on time.

If you have a history of paying your bills on time, you'll have an easier time getting qualified for a mortgage, car loan and credit cards. Even if you've had serious payment delinquencies in the past, a recent history (24 months) of on-time payments carries significant weight in credit decisions.

    2. Keep credit card utlization low.

Credit utilization is the amount of credit you use compared to your total available credit limit. High credit utilization can lower your credit score because it shows that you are prone to racking up large amounts of debt. To improve your credit score, it’s best to keep your utilization under 30%, or even 10% if possible.

    3. Check your credit report for accuracy.

Inaccurate information on your credit report can pull down your score through no fault of your own. Reviewing your report for accuracy can help you identify suspicious activity on your accounts so you can take appropriate action. If you do find an error, contact the original creditor and the credit bureaus to dispute the transaction and clear up your report.

    4. Pay down debt.

If the credit bureaus see that you are making an effort to pay down your debts, it’s a point in your favor. Choose one debt to focus on first, and maximize your payments on that card or loan until the balance is paid in full. Then, move onto the next debt until you’re truly debt-free. Be sure to continue making your monthly payments on all your other debts as you work through your list.

    5. Use credit cards responsibly.

Don’t take scissors to your credit cards just yet! Having open cards and using them is actually beneficial to your credit report – as long as you use them responsibly. Don’t let your balance get too high, pay off your monthly bill and pay in full and on time. At the very least, make your monthly payment on time.

    6. Don't open multiple accounts in a short amount of time.

Opening several credit cards quickly can look risky to lenders because it means taking on lots of possible debt. New accounts will also lower the average age of your existing accounts, which is a significant component of your credit score.

    7. Don't close an account just to remove it from your record.

A closed account will still show up on your credit report and may hurt your score. This is especially true if you’re closing credit cards while opening others.

    8. Only shop for a loan within a short period of time.

Hard checks on your credit, as lenders will make when determining if you can afford the loan you’ve applied for, can hurt your score. It’s best not to apply for multiple loans over a prolonged period of time. Instead, first research various potential lenders and only apply when you are truly ready to take out a loan.

     9. Become an authorized user on another cardholder's account.

If you’re looking for ways to thicken your credit file to build your score, becoming an authorized user on another cardholder’s account can be a great way to get results quickly. Team up with someone who has excellent credit and responsible behaviors, like never missing payments. Your partner’s responsibility will reflect well on you and help build your credit history to boost your score.

    10. Negotiate with your creditors for a lower interest rate.

A lower interest rate can help you pay down your credit card debt at a quicker pace. Reach out to your credit card companies to negotiate for a lower rate. 

Building and maintaining a healthy credit card score is a crucial part of your financial health. Follow these tips to boost your credit score and keep it high!