How to Improve Your Credit Score and How to Improve Credit Rating
So you’ve been tight on money lately and you’ve had some issues paying the bills on time. You know that this isn’t how to improve your credit; in fact, it’s the very opposite. But you’re looking for ways that you can mitigate some of the damage, and we’re here to help.
One of our previous posts explained how to check your credit history and score. This post will give you tips on how to improve credit rating and better position yourself financially.
How to improve your credit score in 4 easy steps
- Check your credit history
Our last post talked about how to obtain your credit report. If you haven’t done that already, it’s a good place to begin. Like any compilation of data, it’s possible that your credit report contains errors. Maybe some payments you made on-time are listed incorrectly as late payments, or maybe the balance owed on your account(s) is inaccurate. Checking your credit report will allow you to locate mistakes and give you the chance to dispute them with credit bureaus. Fixing these mistakes is a step towards credit improvement.
- Pay off credit cards
If you’re wondering how to improve your credit score through debt repayment, paying off your credit card is the way to go. While servicing student loans, mortgages and the like can help your scores, the highest improvement to credit comes from repaying opened-end accounts such as credit cards or lines of credit.
- Opt for payment reminders
This will be most effective for individuals who have an issue with remembering to pay their bills by the due dates. A huge factor affecting your credit score is whether or not you make your payments on time. Many institutions allow you to set up a reminder system via email or text and will send you a notice when your payment is due. Also, opting for automated payments – which extract money directly from your account on the set due date – is a good way to ensure that your payments are always made on time.
- Mix it up
Having a few different credit products can actually help you improve your credit rating, as long as you manage them properly. Demonstrating that you can responsibly handle both revolving credit and installment loans can increase your credit score.
While you may be worried now about how to improve your credit, a few quick fixes can get you started on the road to better credit. If you can cut out some damaging activities – like forgetting to pay on time – your credit rating will climb and you’ll have an easier time borrowing in the future.