Five Ways to Improve Your Credit Score
Whether you wish to finance a car, buy a home or real estate investment, or start a business, a better score will qualify you for better interest rates and greater limits. Give yourself more flexibility with a better credit score.
Here’s how:
1. Pay your bills:
Always pay your balance on time. Automate it with a pre-authorized debit if it helps. This accounts for 35% of your credit score.
2. Use even less of your limit:
Prove that you are a prudent manager of credit. Use no more than 50% of your available limit at any given time, preferably as low as 10%. This is 30% of how they calculate your credit score.
3. Build your Credit History
Keep your first ever credit card active. The longer a credit account is active, the more evidence there is that you have a good relationship with lenders.
Avoid Financial Pitfalls by Finding Your Blind Spots
4. Apply Less Often
Limit how often you apply for credit. It is okay to get 2-3 credit checks ahead of a major purchase – but get it within a short period of time. When you check your own score, this is considered a “soft hit” and generally does not negatively impact your score.
5. Have Many Types of Credit
How many types of credits do you have access to? Are you able to manage both short and long-term loans? If you don’t have a line of credit, apply for one – even if you never use it! Your access to different types of credit accounts for 10% of your credit score.
