How to raise my credit score? Everyone with a lot of negative information in the credit report asks the same questions. Their Google queries might be different such as ‘how can I improve my credit score’ or ‘how can I fix my bad credit’. However, they all want one thing, a credit score that can stabilize their financial situation. A score that can help them in getting loans or credit cards with low interest and easy terms and conditions.
However, this desperate desire for better credit can also make you vulnerable to scammers. A credit repair company can help you in raising credit score. However, you should be able to spot a scammer making false promises. So, before Googling ‘how to raise my credit score’, Google ‘what are my credit rights’.
And, if you want to take some steps on your own to improve your credit, we have useful tips for you.
Pay bills on time
Don’t delay your bills. Lenders and credit card issuers review your credit report. They want to make sure that you are reliable when it comes to payments. Your past payment performance is an indicator of your future payment performance. So, you can set automatic payments. Paying your monthly bills on time will improve the credit score.
Make your cell phone and utility payments on time and get credit
Factor in utility and cell phone payments through Experian Boost, a new, free product. Experian Boost is an opt-in product. This is another way of improving the credit score. You can connect your bank account to Experian allowing the bureau to identify your utility and telecom history.
Pay off your debts and keep credit cards balances low
The credit utilization ratio is a factor considered while calculating the credit score. The credit utilization ratio is calculated by adding balances of all of your credit cards at a given time and dividing the total by the total credit limit you have. Maintain a credit utilization ratio of less than 30% as it reflects your ability to manage your credit well.
Open new credit accounts only when needed
It is good to have a good credit mix. However, apply for a new credit account only when you need it. This is not going to improve credit score. It can harm your score as hard inquiries are being created on your credit report.
Avoid closing unused credit accounts
If costing you no annual fees, avoid closing your unused credit accounts. Closing these accounts can increase the credit utilization ratio.
Avoid multiple inquiries
Your credit report reflects a new hard inquiry when you open a new credit account. Having too many hard inquiries can affect your credit score. These inquiries will remain on your credit report for two years. However, the effect fades over time.
Dispute errors and inaccuracies
Get your credit reports from all three bureaus and review for errors and inaccuracies. These entries on your credit report take a toll on your credit score. So, dispute these entries and remove them from your credit report.