Whether you are starting from scratch or looking to improve your current credit score, there are a few good habits you can incorporate to help you get the credit score you want. They work for everyone, but how quickly they work depends on your current credit scenario and your ability to incorporate all of the tips. Not sure you can tackle all of them? No problem. Start by taking small steps to improve your credit.
Myth: You should not check your credit, because it counts as an inquiry that will negatively impact your credit score.
Fact: You should check your credit score. Each of the three credit reporting agencies is required to provide you with one free credit report per year. You can pull a report from one company every four months, resulting in continuous credit monitoring. If you get an adverse decision based on your credit, you are also entitled to a report. If your credit has been compromised, you may get free reports as a result of a breach. Finally, many credit card companies offer free reporting as part of your member benefits.
Ask for Credit Line Increases
Your credit score is based on what percentage of available credit you are using. Therefore, if you boost your available credit, you improve your credit score. Even better, many of your existing credit card companies may offer a credit line increase without a hard credit inquiry. Once you get the increase, watch your credit utilization. You want to use 30% or less of the available credit you have on each card to get your highest scores.
Pay Your Bills on Time
This may seem like a no-brainer strategy, but many people lower their credit because they lose track of when bills are due. Set up minimum automatic payments to make sure you never miss a payment and watch your credit score rise.
Think About Your Credit Score When Paying Balances
If you are tackling debt, you may be trying to pay off one card and then move onto the next. We have heard this debt-management strategy works for many people. The choice of which card to pay often has to do with interest amounts, but you should also look at what percentage of the balances you owe. If you can pay off cards with lower balances, you can show low utilization on more cards.
Use Your Credit Card for Everyday Expenses
Use your credit card to pay for groceries, gas, utility bills, and phone bills. If you set up a card to handle bills and pay off that card each month, it works just like you are using cash. However, you show consistent usage and the ability to pay your debt, which can boost your school.
Inspect Your Credit Report and Challenge Errors
Many times, lower credit scores are because of errors on your credit reports. Regularly inspect your credit reports and challenge errors. You will be surprised how much that can improve your credit score!