As you probably know, a healthy credit score is important to your financial health, but many people struggle to overcome past mistakes. Since credit scores consider many years’ worth of your purchase and payment history, it can take time to improve your score even incrementally. Luckily, there are a few simple ways to get your score moving in an upward direction.
Reduce Your Debt-to-Credit Ratio
The closer you are to reaching your overall credit limit, the riskier you look to potential lenders. Ideally, you should utilize 30 percent or less of your allowable credit, so start paying down balances if you’re beyond that point. Start by tackling your high interest debt, like credit cards, and you’ll make progress more quickly.
Get ‘Nuisance Balances’ Under Control
If you have more than one credit card, it’s easy to charge $25 on one, $50 on another, and so on. These ‘nuisance balances’ add up quickly and can leave you carrying balances on multiple cards at once. This doesn’t look good to credit reporting agencies. Instead, keep just one or two go-to credit cards with you, and keep zero balances on any others.
Automatic Your Payments
It’s the digital age, so why not take advantage of technology to keep your credit strong? Late payments do tremendous long-term damage to your credit score, so consider giving your credit a boost by eliminating the possibility of late or forgotten payments. Automatic payments ensure your bills get paid on time without you lifting a finger and can go a long way towards keeping your payments on track even when life gets crazy.
You can’t improve your credit score overnight, but with a little patience and a sound strategy, you can put yourself on track for a higher credit score in the future. Improving your debt-to-credit ratio, controlling nuisance balances and ensuring you don’t miss payments will put you on a trajectory for improved credit over the long-term.
