Tips To Help Your Credit Score Soar

 Tips To Help Your Credit Score Soar

So your credit score isn’t exactly where you’d like it to be. And improving it may seem like pulling teeth. But it doesn’t have to be painful (or require a trip to the dentist).

A credit score is a statistical approach to determining the likelihood of an individual paying back money that is borrowed. So your credit score is, of course, tied to your credit history. Your credit history comes into play in determining your qualifications for loans and the interest you will pay. If you have a good credit history, it will be reflected in your credit score. A bad credit history, on the other hand, could bring down the score.

Fortunately, there are several ways to boost your score and have a positive impact on your credit history. Based on advice from experts, here are some of them:

  • Obtain a copy of your credit report from This is a website, authorized by federal law, that gives you access to free credit reports. The three major credit reporting bureaus – Experian, Equifax, and TransUnion – must each give you one free copy per year. With that in mind, plan to get a copy from each of the agencies every four months.

Once you have a copy of your report, check it over closely, and especially look for errors. If you find any, you can dispute them online with any of the credit bureaus.

  • Pay your bills on time. Timely bill payments go a long way toward achieving a good credit score. If you’re prone to forgetting when bills are due, set up automatic bill payments through your lender or your financial institution.
  • Don’t miss making payments or pay less than the minimum amount due.
  • If you are rebuilding your credit, a secured loan like a passbook loan is a great way to repair your credit. In this type of loan, you borrow against deposits you hold in the bank.
  • Eliminate small balances on cards you hold. This is because one of the things that adversely impacts your score is the number of cards that have balances.
  • If you don’t have any credit cards, get one or two. This will help your score as long as you don’t charge too much and you pay your bills on time.
  • If you have credit cards and you’re thinking of closing them, don’t do it. Your credit will drop with each card you cancel.
  • Don’t overuse your credit cards. Try to stay well below your credit limit for each card. This is important when it comes to assessing your “credit utilization ratio,” which is a major factor used in credit scoring models to calculate your credit score. You can figure out your utilization rate by dividing your total credit card balances by your total credit card limits. You should strive for a ratio of 30 percent or less.
  • Another score-booster is to pay down your balances and keep them low.
  • Don’t close old accounts that reflect a great repayment record. A history of good debt is good for your credit score.
  • Your score dips a bit each time you apply for credit. It drops because a new application usually indicates a person wants to tap into more credit.

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