How To Improve Your Credit – Or Get Credit
Having good credit will make your life much easier when wanting to make a big purchase on a house, a car, etc. With good credit comes great responsibility. It’s not as difficult as it seems to gain (and retain) a good credit score. Here are some of my personal tips how I received an Excellent credit score.
How to improve your credit scores – or to boost your credit score
- Don’t buy things that you cannot afford – This is most important! Many would take advantage of “free” money, thinking that you can purchase and pay off at a later time. This is not the case! Someone can finance multiple items thinking that they can pay off slowly, but certain life circumstances can happen and someone may not be able to afford their payments. This can lead to credit debit, which causes late payments, which then drops your score. So, if you are in a place where you are unsure whether or not you can make payments towards a purchase… I don’t recommend, unless it’s an absolutely emergency.
Pay bills on time – Paying your bills on time can improve your credit scores. Try to avoid paying late. One way to ensure that your payments are being paid on time is to enroll in automatic payments. I recommend making sure that you have a sufficient amount in your account for the auto withdrawals. Automatic payments also is eco-friendly !
- Leave your old credit cards open – If you are thinking about canceling one of your inactive accounts, I recommend keeping it opened but empty! The reason why is that you still have your credit history with that account. This is extremely important if you do not have any other credit sources to contribute to your credit history.
- Stay under your credit limit – This relates to Tip #1. Stay at least 30% of your credit limit. Why? Because you want to find balance in credit to limit ratio. This is pretty much your balance to your limit. If you’re spending more than your monthly income on payments, this may credit utilization. Try to use less than 30% percent of the credits available to you.
- Pay off at much as you can as a comfortable pace – The goal is to pay off in full when you get a statement. Try not to carry a balance from month to month. If you have quite a bit of debt, this may take some budgeting to figure out. Slowly but surely, once you have your debt paid off, aim for full payments each month.
A neat tool is to check your credit score online! Some banks offer this option. I also recommend annualcreditreport.com – where you can check your score for free once a year.
If you are in credit card debt, or looking for ways to improve your credit score, don’t give up! It can take time to build up or repair your credit. Good luck!