Increase Credit Score | 5 Ways to Raise Your Credit Score

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Before we begin with tips on how to increase credit score, know that your credit score will not change overnight and will take some time for it to be reflected from these actions. Sometimes it may take some months before you even notice a change. Remember that credit scores are easy to drop but hard to increase. Keep reading to learn how to increase credit score without having to sacrifice much.

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5 Ways To Increase Credit Score
1. Keeping your credit utilization at 30% or less
Your credit utilization is the percentage of your total debt-to-credit ratio. For example, take one credit card you own and look at the amount of debt you owe. Then take that number and divide it by that card’s total credit limit. If you have a $2,000 debt on a credit card which has a $6,000 credit limit, you will have a credit utilization of 30%. It’s important to keep this number at 30% or less. There are two ways to get this done. The first way is to clearly pay off your debt. That can be over time and you need to chip away at the debt. It’s best it you pay your balances in full. The second way is to request a credit line increase. If there is no hard pull or hard inquiry that is the best case scenario.

2. Pay your bills every month on-time and in the full amount that is due
This is the number one reason that people have a lousy credit score. Every payment that you miss can drop your credit score by 50 points or even more. It’s extremely crucial that you pay your credit card bills and all other bills on time and with the full amount listed. If you only learn one thing today, this is the most important part and that you need to keep paying bills on time to increase credit score.

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3. Have a good mix of credit
By having a car loan, credit card, personal loan, or any type of credit that you are paying on time will show you can handle debt. This is not as important, but it is more important to pay these on time.

4. Build your credit history.
A lot of your credit history is not under your control and is in control of father time. But what you can do is to not close any credit cards. If you do not have a reason to close the card, then don’t do it. As your credit grows older with time, it is helping your average age of your credit length history grow at the same time.

5. Avoid too many inquiries
Applying for too many credit cards at one time will mess up your credit score. You do not want many credit inquiries on your account. Keep this in mind if you want to increase credit score in your name.

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