How to Improve Your Credit Score Today
Dealing with bad credit is not only costly, it can also be a very stressful thing. However, just because you are currently dealing with a bad credit report or credit score, that doesn’t mean you will be stuck with it forever.
In fact, there are a number of different things that a person can do to get on the right track in terms of improving their credit score. The good news is, it shouldn’t take you years and years to get your credit score on track. Also, it shouldn’t require a ton of effort, just a few life changes, and some modifications when it comes to your financial habits.
To see how your credit score is calculated, take a look at this infographic.
With that in mind, here are a few things you can do to improve your credit score, starting today.
Create a Budget
If you want to improve your credit score quickly, you will need to know what you are spending money on, what areas you are overspending on your credit card, and just how much you are spending. Improving your credit score takes a lot of change in different financial areas and having a budget can make it easier to manage. When you know how much money is going out each month, it can be easy to see where you need to cut back.
If you want to learn how to create an effective budget, click here.
Get a Copy of Your Credit Report
To start working on increasing your credit score, you need to know what you are up against. Sure, you can guess and assume which part of your credit report is leading to a less than ideal score, but it is a better idea to actually get a copy of your credit report. You can order a copy of your credit report from each of the major bureaus for free, and they will help you see which of your credit accounts need the most work and which are going well.
Having trouble understanding your credit report? Try reading this.
Pay Off Any Outstanding Debt
Of course, one of the quickest and best ways to improve your credit score is to pay off any outstanding debts that you might have. These are the debts that likely caused your credit score to fall in the first place, so getting rid of them will help your score climb back up, quickly. You should be paying off your debts anyway, but getting rid of them quicker will only help your score rise even quicker. If you are wondering how to raise credit score by 200 points or how to raise your credit score in only 30 days, it could be as simple as paying off all of your debts and ensuring you never get in credit card debt like that again.
For more information about consumer debt and how it affects you, check this out.
Keep a Suitable Credit Utilization Rate
It is very important that when you are trying to raise your credit score, that you actively and responsibly use your credit card. However, it is equally as important to keep your credit utilization rate low, generally under 30%. This is because if your utilization ratio is sky high every month, creditors and lenders might worry that you are at risk of overspend on your credit card. This can be done either by cutting down your credit card spending or increasing your credit limit, as long as you can handle it.
As a side note, the is why paying down debt is an important part of improving your credit score. Typically, those who carry a lot of debt from month to month have a higher credit utilization ratio. Paying down some of your debt and your ratio will also lower.
Make Your Payments on Time
Making payments is great, but if they are consistently late, you aren’t doing yourself any favors. While late payments are better than no payment at all, they still won’t help you much in your journey to improve your credit score. You should have a set day (or multiple days) every month where you make your payment to ensure it’s not late. If you have trouble making your payments on time for one reason or another, you should consider making automatic payments to ensure that your credit card bills are paid on time.
What else happens when you can’t make your loan payments on time? Find out here.
Don’t Close Old Credit Accounts
While your first instinct might be to remove any old debt or credit accounts on your report, this will only hurt your credit in the long run. Old credit accounts are still an important part of your credit health. This is because credit history is one of the biggest factors in determining your credit score. Closing an old account or canceling a credit card you’ve had for years means you’ll be removing that part of your credit history. The longer your history of good credit, the better your score will be.
Keep Tabs on Your Credit
While you don’t need to check your credit report every single month, you should look to check it every few months to ensure things are moving in the right direction. This will help you keep track of your financial health and will always keep you informed on how your credit is looking. Not only that but if you see anything strange or some sort of error on your report, you’ll be able to report it immediately. While errors aren’t incredibly common, they do happen, so be sure to reach out to the bureaus if you see any incorrect information. Keep in mind that you should only dispute incorrect information. Disputing negative items or accounts that are delinquent won’t work.
For some more credit repair tips, look here.
Need Help Growing Your Credit Score?
There are a variety of different things that you can do to improve your credit score quickly. But, if you’re interested in seeking help to improve your credit score, Rebound Finance can help. We offer a wide variety of credit building products and services to meet the needs of all American consumers.