How to Improve Your Credit Score
Check Your Credit Reports
Beyond a bigger issue like identity theft, your credit score can be impacted by a number of factors. So when you ask “how to boost my credit score”, or “ways to raise credit score”, make sure your reports are as factual as possible by obtaining one from all three major credit bureaus: Experian, Equifax, and TransUnion. The Fair Credit Reporting Act entitles you to one free copy a year that you can access at AnnualCreditReport.com.
Assess Your Debts
The next step to improving your credit score is to list out all of your debts, so you know exactly what you owe and to whom. Two determining credit score factors are:
- Your debt to credit ratio: How much available credit you have vs. how much you have actually charged. Ideally, you want to keep your credit card charges under 30% of the available balance every month.
- The number of cards with balances: The more cards with balances, the lower your score.
Create a Payment Plan
Take control of your debts by creating a repayment plan that includes tackling debts in collections, eliminating small balances on cards, and working to pay down larger debts.
Open a Credit Card
If you have no outstanding debts or low outstanding debts, your credit score could also be low because you simply have never had a loan or credit card before. Opening a card in Brooklyn can help establish credit, as long as you keep under the 30% balance and pay your bill on time every month. A simple way to improve your credit score is to pick one recurring monthly charge and have it paid with your credit card, making sure you set the money aside to pay the balance off when the bill arrives.
If you don’t qualify for a regular credit card, consider a secured credit card. This type of card has a small limit and usually requires an initial deposit of up to a couple hundred dollars to open.
Build a Credit Age
Your credit score is built over time. If you are starting today, one way to improve or add to your history is to become a user on a family member’s account. As long as they have paid their bills on time, that will begin to reflect well on you. Just make sure both parties have a clear agreement on who actually gets to use this line of credit and how payments will be handled.
Minimize New Credit Applications
While we discussed a new card or loan as one of the ways to improve your credit score, you will want to be judicious in applying for new cards or loans. When lenders do a hard inquiry of your credit, that can end up impacting your score for up to a year.
Find Out More Ways to Raise Credit Score at Major World
Looking for additional advice or help on how to get a better credit score? For more tips to increase credit score, contact the Finance Center at Major World. Our credit experts can walk you through the process and answer any additional questions in Long Island City. Contact us today to learn more ways to improve your credit or see if you qualify for a used vehicle purchase!