4 Ways to Improve Your Credit Score

Having a good credit score can change your standard of living. If your credit score is high, you can get approved for a home or car without any worries. If your credit score is low, you may only qualify for loans with high interest rates.

Regardless of your credit rating, there is always room for improvement. The good news is you don’t have to live with a low credit score for the rest of your life. Here are 4 ways to improve your credit score.

1. Start paying your bills on time.
This tip might be obvious, but it’s important to remember. Many people underestimate the impact that developing new bill-paying habits can have on their credit scores.

Although you can’t change your past performance, you can create a new future if you develop this habit. Thirty-five percent of your credit score is calculated based on your credit history. If you start paying your bills on time this month, you can have a stronger credit score in 6 months.

2. Keep your accounts open.
Contrary to popular belief, closing your accounts can actually lower your credit score. For that reason, you should keep them open.

Instead of closing your accounts, you should make every effort to pay the balances in full. If that’s not affordable for you, take action that will lower your credit utilization rate to 30% of the credit limit.

3. Dispute any information that isn’t accurate.
Take a few moments to review your credit reports from Experian, TransUnion and Equifax to determine that they are accurate. According to a recent study by the Federal Trade Commission, at least 42 million credit reports contain errors.

If you find any errors on your credit reports, you can dispute them with the credit bureaus. The credit bureaus will investigate the dispute and make a determination.

The disputed items will be removed if they are inaccurate. After the items have been removed, your credit score may increase.

4. Get a secured credit card.
Secured credit cards are good options for people who don’t qualify for traditional credit cards. Here are some things you need to know about secured credit cards.

  • You will be required to provide a deposit to secure the credit card limit.
  • Secured credit card issuers report to credit bureaus.
  • You should manage these cards carefully.

After you have established a good payment history on your card, the credit card issuer may send you an offer for an unsecured credit card.

Improving your credit takes time. Applying these steps can start you on the journey to good credit.