1. Pay Your Bills On Time
Being late on payments is the number one contributor to poor credit. Just pay on time, even if you’re paying the minimum balance, if it’s on time, it doesn’t hurt you. Collections have a major impact on your score, so avoid those altogether by paying your bills on time.
2. Get Current and Stay Current
If you have missed payments, bring them up to day asap. The longer you pay your bills on time after being late, the more your score will increase. Older credit problems contribute less to your overall score so delinquent payments won’t haunt you forever, if you get current now.
3. Keep Your Balances Low on Revolving Credit
This is simple, don’t max out your credit cards. You want to keep low balances on your cards. High outstanding debt can negatively affect your credit score.
4. Don’t Close Unused Credit Cards
Some people think that closing unused cards is a short term strategy to improving their credit, but it’s not a good one to adopt. In fact, owing the same amount but having fewer open accounts may lower your scores.
5. Don’t Open New Credit Cards You Don’t Need
We’ve also seen this strategy of opening cards to increase your available credit. However, this approach can backfire and actually lower your credit score because every time you apply for a card, it counts as a ‘hard inquiry’ which affects your score.
6. Re-establish Your Credit History
If you have had problems in the past, opening a few new accounts responsibly and paying them off on time will raise your credit score in the long term.
7. Have Credit Cards –
Have them, but manage them responsibly. Having credit cards and installment loans, as long as you’re making payments on time, will rebuild your credit score. Someone with no cards, and no loans, tends to be viewed as higher risk than someone who has responsibly managed credit cards.
Finally know that checking your credit score does not affect your credit score in a negative way. As long as you order your credit report directly from the credit reporting agency or through an organization authorized to provide credit reports to consumers it counts as a ‘soft inquiry’ and doesn’t impact your score.
So don’t stay in the dark, check your score, and watch it increase. If you have any questions about how we can help you get back on the credit fast track, please email us or give us a call right now!