Smart Tips for Improving Your Credit Score

 

Want to give your credit score a boost? The truth is that it won’t be easy. Improving your credit is a marathon, not a sprint. Don’t expect to get quick results because rather than looking at your present actions only, your credit report takes into account your behavior over the years.

A good credit report comes about by consistently making the right financial decisions. Nevertheless, there are some easy steps you can take to ensure that your score gets better over time.

1. Closely monitor your credit card balances

Among the main factors that influence your credit score is how much credit you’re using versus how much revolving credit you have. You want to keep the percentage low for you to have an excellent credit rating. The ideal number is 30 percent or less.

Experts recommend paying down your balances and keeping them low to boost your score.

You might not realize it, but you might still have a higher utilization ratio than you might think even if you pay your monthly balances in full. It happens because some credit card companies report the balance on your statement to the credit bureau, and your credit score takes these scales into account even if you pay them in full every month.

It might be a good to ask your credit card company if they will accept staggered payments throughout the month.

2. Clear your credit card balances

Experts note that eliminating nuisance credit card balances is an effective way of improving your credit score. These are the small balances you have on multiple credit cards.

How does this improve your credit score? One of the factors influencing your score is the number of cards that have balances. That’s why charging, say, $25 on one card and $40 on another has a negative impact on your credit score. You’re better off using the same card

A good strategy for boosting your credit score is bringing together all the credit cards in which you have small balances and paying all of them off. After that, pick one or two cards that you can charge everything. This way, you avoid spoiling your credit report with many small balances.

3. Don’t remove old debt from your report

Some people are under the mistaken impression that old debt on their credit report hurts it. As soon as they finish making loan payments on their car or home, they’re calling the bureau trying to get the record of the debt removed.

It is true that negative events hurt your credit score and most of them will stay on your report for seven years. However, adamantly trying to have old accounts removed from your credit report is not a better idea.

Good debt – debt that you dealt with well and paid as required – is good for your credit report. A long history of good debt looks good on your credit report.

The takeaway: Leave real accounts and old debt on your report for as long as possible. Don’t close old accounts in which you have a strong repayment record. Removing them is like getting straight A’s in college and later removing this file from your resume.

4. Use your calendar

If you’re shopping for a student, car or home loan, it’s a good idea to do your shopping within a short period.

It is because with every application you make for credit, a small dip occurs on your credit score and it lasts for a year. The reason is that a person making multiple requests for loans typically wants to use more credit.

Even so, with three types of loans – auto, mortgage and, more recently, student loans – credit score formulas take into account the fact that a person may make multiple applications but only take out one loan.

The FICO credit score, which is more commonly used by lenders, doesn’t factor in applications in the 30 days before scoring. But if it discovers some that are more than 30 days old, it will take into account those made within a regular shopping period as a single inquiry.

The credit score used determines the length of the shopping period. Experts note that you have 45 days with lenders that use modern scoring software, whereas you have 14 days with older software. Irrespective of how close together you make applications, the older software will not count multiple student loan applications as one.

In short, make your requests within the shortest time possible.

5. Pay bills on time

In case you’re looking to make a major purchase, such as a car or a home, you might be trying to come up with a huge amount of cash. You don’t want to start getting late on bills that you are juggling. Even if you have a tidy sum in your savings, a dip in your score may significantly affect your future loan applications.

The most efficient ways of getting a good report are only making timely payments month after month.

It is a no-brainer. Your credit report affects your credit score. If your bills are unpaid on time consistently, it looks bad on your credit report and hurts your credit score.

It may even apply to items that aren’t typically associated with credit reporting such as library books. It is because while the library does not submit reports to the bureau, they may eventually use a collections agency for unpaid bills, and that company may include the item on your credit report.

So while saving up for a major purchase is smart, make sure you don’t skip regular bills to do it.

Conclusion

The best strategies to improve the health of your credit score is to avoid doing anything that may cause it to dip. Two of the main culprits are suddenly paying less or missing payments altogether.

As a rule of thumb, it’s simply best to steer clear of anything that poses a risk to your credit score. Get your loans from Bay Area Title Loans, which has the best interests of its customers at heart, to ensure that you keep your credit score healthy.

Visit https://bayareatitleloans.com for more information.