Improving Your Credit Score

by Mother Huddle Staff

No matter if you use check credit score tools regularly or if you just checked your credit for the first time, you may need to improve your score. One of the first steps toward improving your credit is to pay attention to your score by using a check credit score tool since you will then have information on what factors are changing your score the most. There are some factors that are going to be more significant than others, but there are a number of things you can do to improve the score.

Some things are going to be more important than others. Payment history and credit utilization ratios are two of the most important things you can work on.

Pay Bills on Time

When a lender is reviewing your credit report and looking at your score, they are interested in whether you can reliably pay your bills on time. Past payment performance is a predictor of future payment performance. You are able to influence your credit score if you pay all your bills on time. Settling an account for less or paying late will have a negative impact on your score. You want to pay all bills on time and not just loan or credit card payments. Use resources that are available, such as automatic payments, to make sure that you can pay on time. If you are behind on payments then pay them as soon as possible. The impact on your score will decline over time, even for late payments that stay on your report for seven years.

Pay Off Debt

The credit utilization ratio is an important factor in determining your credit score. This number is calculated by adding up your credit card balances across all accounts and then dividing by your total credit limit. Lenders will want to see a ratio of 30% or lower since it tells lenders you aren’t maxing out your cards and can handle your credit well. You can also become an authorized user on someone else’s account, as long as he or she is also using credit responsibly, in order to help your credit utilization ratio.

Only Apply for New Credit When Needed

You Shouldn’t be applying for new credit unless you need it. If you are opening accounts just to have a better credit mix, it won’t help your credit score much. You will have too many hard inquiries and it can tempt you to accumulate debt and overspend. While applying for new credit can increase your credit limit, the act of applying will create a hard inquiry. When you have too many hard inquiries, it has a negative impact on your score and will remain on your report for two years.

Don’t Close Your Unused Cards

If your cards aren’t costing you money with annual fees then there is no harm in keeping them open. When you close an account, you are lowering your overall credit limit, which affects your credit utilization score.  

Dispute Any Inaccuracies on Your Report

You should be checking your credit reports and fixing any inaccuracies. Wrong information can negatively impact your score. You want to verify the accounts listed on your reports are right and if you see any errors, get them corrected as soon as possible. Monitoring your credit can help you fix any inaccuracies before it can do damage to your report.

How Long Does It Take You to Improve Your Credit Score?

Unfortunately, there are no quick fixes for bad credit scores. The length of time it will take you to improve your credit score will depend on the reason behind the change. Most negative changes are because of a negative element being added to your credit score. These elements affect your score until a certain point. For example, delinquencies stay on your report for seven years. There are no shortcuts.

How Changes Affect Your Score

There are a lot of specific actions that affect your credit score so determining how certain actions affect your score depends on different factors. For example, if you close two accounts, it lowers your number of revolving accounts and decreases your total amount of credit available. This means that you have a higher utilization rate. This one change can affect many different things on your credit report and it’s impossible to know how one action can affect your score. This is why the risk factors that are given with your score are necessary.

Building Your Credit Score

If you have to establish credit, it can take a lot longer than just improving your score. You will need to do different things to establish your credit and fatten up your credit file in order to have a score. You can use a credit builder loan, become an authorized user on someone’s account, or apply for a secured credit card. 


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