No matter if you are looking for a mortgage, personal loan, auto lease, or credit card, your credit score is what allows you to be approved, and determines what you are going to pay in interest rate. If you are in need of a boost, it is never too late to make a few adjustments.
Check Your Credit Report
It not something that has to be done every month, but at least once a year try and review your credit report to ensure that everything is accurate, especially with the amount of fraud and hacking these days that seem to affect just about anyone these days. You are entitled to a free copy of your credit report from the major credit bureaus to take a look. Just keep in mind that reports are usually a month behind in catching up, so it may not be completely up to the day accurate.
Set Up a Payment Schedule
Payment history has the largest factor in your credit score at 35% so you will want to make sure that not only have late payments stopped, but since late payments can stay on your credit report for up to seven years, that they never are thirty days passed the due date ever again. Take note of all of your payment due dates and set up automated payments so that they’re taken out the same time every month and you will not have to worry about making them.
Pay Down Debt
Sure, if your cards are maxed out, your score will greatly be affected. The amount you owe could affect 30% of your credit score, so you will want to make sure not only for saving money on wasted interest payments by carrying over debt each month, but that the gap between your credit available and what you owe is the most it can be, so try and make the largest payment you can each month in order to get that principal balance down.
Keep Accounts Open Even at Zero Balance
You may be so excited that your account balance is down to zero that you want to cut up and close the account so you do not use ever again, but you are only partially right. If you are worried you will use the card again, by all means cut up the card, but you should keep the account open. Have the available credit, and length of the account will help your score in the long run.
Limit Credit Applications
While it may seem like a small portion of your credit score at 10%, new credit inquiries lowering your score still could cost you if it means the difference keeping you from having excellent credit. Inquires can stay on your credit report for two years, so make sure that if you are applying for credit that you are serious about, and avoid browsing around only to decide later. Co-signing for an application will count as well, and could be another issue altogether vouching for someone else, so be careful.
Request a Credit Line Increase
Since the amount owed compared to what credit you have available to you is such a large part of your credit score, if you need to widen the gap a bit you can ask for a credit line increase. Since you already have the account, it could be a soft pull of your credit report, but you may want to double check before you give the approval to pull. Just remember, just because you now have extra credit available that it does not mean to use it.
Don’t Be a Risk
Do not give the creditors any reason to suspect that you are any kind of credit risk. If you begin charging like crazy or max out your credit cards, your account limit could be frozen or interest rate promotion offers could begin to fade away. You want to be a responsible borrower, both in paying on time and paying back what you charge.
Now that you are able to see your credit score on monthly credit card statements, you may be frustrated to see the score not shooting up every month, but it will take time and patience. The more you pay down your balances, longer the accounts are open and are in good standing, the higher the score will go, so stay focused on raising the score and while it may take even years, it will be worth it when you are saving paying extra interest on credit cards, mortgage, or loans.