In the United States, the average FICO credit score is 711. Meanwhile, less than 18.6 percent of individuals have a score of over 800 on the credit rating scale.
If your score is poor, you’ll have a difficult time getting a loan or opening new lines of credit. Thankfully, it is possible to improve your credit score rating with some effort and planning!
Today, we will provide you with some helpful tips that will help you boost your credit rating!
Table of Contents
Review Your Credit Reports
The first step you should take is recognizing your strong and weak points. You can get a copy of your credit report from the credit bureaus, such as Equifax, Transunion, or Experian.
Here are some determinants that influence your credit rating for the better:
- Low balances on credit cards
- A mix of loans and credit card accounts
- History of making payments on time
- Older lines of credit
- Minimal new lines of credit
By learning what creates a good credit score, you can identify the areas you need to improve and take action.
Pay Your Bills on Time
Your payment history influences 35 percent of your score, making it the most important factor. Thus, paying off old debts is one of the best things you can do when it comes to your credit score.
It is equally important to avoid late payments, so set reminders on your phone to let you know it is time to pay your bills. Alternatively, you can set up autopay, which makes paying your loans and credit cards effortless.
Further, if you are short on cash for one month, you can always use another credit card to make your minimum payment. However, this will cost you money in the long run if you don’t pay off the credit card in full before the end of the billing cycle.
Avoid Maxing Out Your Cards
The second most critical factor of your credit score is your credit utilization, which refers to the amount of your credit limit that you are currently using.
The best way to keep your credit usage to the minimum is by paying your balance in full each month. If that is not possible, you should aim to use less than 30 percent of your available credit.
A helpful trick is to ask your lender to raise your credit limit. By doing so, you will be using a smaller portion of your total available credit. Just be sure not to raise your spending.
Additional Tips To Improve Your Credit Rating
Since payment history and credit utilization are the two most important factors, you should start with the previous tips. However, there are more actions that you can take to improve your credit score, including:
- Avoiding opening new lines of credit
- Keeping old accounts open
- Paying off delinquent or collection accounts
- Consolidating your debt onto one loan
- Using credit monitoring services
All of these actions will positively affect your score and help you move up the credit rating chart! If you need additional support to improve your credit, check out this info.
Start Improving Your Credit Rating Today
Improving your credit rating is a worthy goal, especially if you plan on buying a new house or car in the future. Since it can take months to improve your score, the best time to start is now! With hard work and consistency, your efforts will pay off.
Did this article help you understand how to improve your credit rating? If so, be sure to check out more of our informative posts!