How to Improve Your Credit Score – A Few Ideas

There are tons of hints and tips out there on how to improve your credit score but none of them will affect your overall credit report and to be at all effective in bringing about any changes to your score. Your report is basically an expression of your financial responsibility. When your score changes it can either bring about a welcome improvement or a severe decrease. Knowing exactly what goes into making your score the way it is can go a long way towards improving your score.

Your report is basically an expression of your financial responsibility. The larger and longer your accounts are open the better. If you have short accounts but a decent balance then your score will suffer. On the other hand, if you have many bad credit accounts that are older and have not been used in quite some time, your score will take a huge hit. Your goal should be to have a good mix of good and bad accounts. That is the recipe for success when you are looking at how to improve your credit score.

In order to help you understand how to improve your credit score, you need to understand how accounts are valued. All credit card balances are evaluated in the same way. They are all valued based on their current debt to income ratio. The higher this ratio the higher the available credit and the lower the overall credit rating.

How to use credit wisely is to only use credit that you can pay off as quickly as possible. It is also important to look at your available credit carefully. Some people have too many credit cards and never use any of them at all. Their credit report makes a big difference in the overall score. The more available credit that you have the better. You want to have around 5% of your total credit available to you.

Your payment history plays an important part in how to improve your credit score. Each and every paid bill have a notation on the report that it is due. The more mature the account the better. If you pay your bills late, or you skip a payment, that counts against you.

If you don’t have too much available credit and you make all your payments on time, you should be able to average about three payments a month to keep your rating up. If your average age is 35, you should try to keep your balances as low as possible. If your balance is high you will be viewed as a bigger risk and it will impact negatively on your credit history. You can increase your average age by getting rid of the highest balance and keeping the lower balances higher.

You should also try to close accounts that you have that are paid off but are not being used. Closing they also have the effect of closing any type of negative information on your reports. This is one of the ways that companies are finding out how to improve your credit score when they check. The best way to close accounts is to transfer the balance to another type of credit card or department store card. You will need to cancel the old account so that it is not reported to the credit bureaus. This process can take about thirty days if the company is transferring the balances but can vary depending on the company.

Another step to take when you are trying to know how to improve your credit score is to pay your bills on time. By paying your bills late you will be damaging your credit rating. If you don’t have too much available credit you should look at getting some credit cards that offer cash back or rewards programs. If you can qualify for a good cash back or bonus reward program you should definitely apply for it. The more money that you can increase your monthly payment with, the better off your credit scoring will be. This is important because credit bureaus factor this into your score as a way of determining how responsible you are with your payments.

2 thoughts on “How to Improve Your Credit Score – A Few Ideas”

  1. Great tips to keep up with your credit score and improve them. The best one was to close the accounts that are paid off and not in use in this way you can get rid of one account and reduce the work.


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