Ways To Help Increase Your Credit Score

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Increase Credit Score

We all know that having a high credit score can help you save thousands of dollars over the course of your lifetime. But I’m not going to get the benefits today. We’re going to get straight into the five ways to help increase that score.

Credit utilization rate

Credit utilization rate is a really fancy term for the ratio of how much your credit limit is versus how much you’re using. So if you have a credit limit of ten thousand dollars and you’re using five thousand dollars of that ten thousand dollar limit you’re using 50 percent credit utilization rate. One way to increase your credit score is to keep that credit utilization rate under 30 percent. So to use that ten thousand dollar limit example you should be. Three thousand dollars are under. The reason it’s so important to do that is that credit utilization rate accounts for 30 percent of your FICO score. That’s a big chunk guy. So let’s keep that in mind.

Eliminate multiple balances

Having multiple balances and multiple cards actually hurt your credit score, so instead of charging 100 dollars worth of charges on three different cards try and put those hundred dollars on one card. So say for example if you have three credit cards and one has 50 dollars on it the other one has 20 and the third has 30. Even though that equals one hundred dollars credit bureaus C3 open lines of credit which hurt your FICO score. Try and focus on one card and pay that card off on time and every month.

Leave the old good debt on your credit report

A lot of people want to get rid of any debt on their credit report because they think it helps them but actually showing a history of good credit and good loan payments actually help you and put you in good standing with the credit bureaus. So example, if you paid off a mortgage, paid off a car loan or paid off significant student loans it actually makes sense to leave that on your credit report. But the key is only if you handle that debt well meaning that you paid it on time every month trying to get rid of good old debt is like getting rid of a good report card. However, this is also a double-edged sword. If you had debt that you haven’t handled will get that off of your report ASAP because that will ultimately hurt your credit score.

Minimize credit checks

Believe it or not, every time someone runs a credit checks on you that actually lower your score for an entire year. I couldn’t believe it either when I heard this but I did learn about it and verify it and this is indeed true. So say for example every time you go to a car dealership or you go to a shop for a mortgage or you’re looking to rent an apartment. Every time someone checks your credit score that causes a ding so be cognizant of that guys. Eliminating these multiple credit checks will actually help increase your credit score over the long term.

Pay your bills on time

This should be common sense guys but I know sometimes there’s a little bit more month at the end of your money and I know times can get tight sometimes. However, this is the single biggest factor in increasing your credit score. If you don’t pay your bills on time the credit bureaus get reported to and they know that you’re not paying your bills. This dings your credit incredibly to the point of even becoming not even creditworthy. Make sure that if you’re paying bills at the end of the month make sure that the bureaus are reporting them on time. If you have a bill that’s due on the 30th of the month try and get that paid about a week earlier. It gives everybody time to get reported properly and ultimately your credit score will never be put at risk. So please keep this in mind guys pay your bills on time. Combining all of these tips are a guaranteed way to increase your credit score.

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