A good credit score is the key to your financial success now and in the future. Your credit score should be monitored on a regular basis, and it should be a priority to keep your score as high as possible. Doing this will enable you to purchase the things you want including a home, cars, credit cards, and other loans and money services.
Since a good rating from the credit bureau is so important, savvy consumers are always looking for ways to boost their less than stellar credit score. Fortunately, there are some ways that you can increase your credit rating and reap the benefits of having good credit. Here are a few of the most popular ways to raise your credit rating.
5 Tips to Boost Your Credit Score
- Review Your Credit Report from All Bureaus – It is a good idea to review your credit report at least once a year. Federal law allows every consumer a free copy from each of the three major credit reporting bureaus annually. Be sure to look for errors or omissions that could be negatively affecting your credit score and report them immediately to the credit bureau for revisions.
- Avoid Excessive New Accounts – While increasing your available credit limit can often give your credit score a bump in the right direction, be careful not to acquire too many new accounts, as it can be a detriment to your rating. Opening too many new accounts can indicate to creditors that you may intend to rack up excessive charges on these new cards, making you a credit risk.
- Pay Creditors Timely – Your payment history plays a big part in determining your credit score. Making consistent, on time payments is a great way to establish, maintain, and even boost your credit score.
- Don’t Close Old Credit Accounts – Those older credit accounts that have been paid off can still benefit your credit score because they indicate a good history of payments which can boost your credit rating. Leaving them open is a great choice and doesn’t mean you have to use them.
- Be Aware of Credit Utilization – The total of all of your debt divided by your total credit limit is called credit utilization. It is a major factor that makes up your credit score. It works like this: Your credit limit is $10K and your balance is $4K, making your utilization rate is 40%. The lower the utilization rates, the more it raises your credit score. Having higher limits with lower balances is key.
Boosting Your Credit Score is a Savvy Financial Move
With a little diligence and some savvy on-time bill-paying habits, you can see your credit score start to climb. Following these tips for raising your score and a practice of smart choices will lead to a solid financial future with a credit score that will open financial doors to everywhere you want to go.