Four tips to improve your credit score
You may be looking for a loan to buy anything from a car to a home, and only one thing stands in the way of you getting the best deal—your credit score. The better your credit score, the more access you have to reasonable borrowing rates and the amount of credit you need. Even if you don’t have a bad credit score, you may want to improve it so you can increase your ability to borrow. Here are some tips to help you get there:
- Know your enemy: Run your credit report and fix any mistakes as soon as possible, i.e. debts you didn’t take out or someone else’s information on your account.
- Pay off what you can: Start by paying your higher interest loans first and then settle any secured debt or lines of credit if you can. Also make sure you pay your bills (cell phone, hydro, etc.) on time.
- Take only what you need: Try not to use more than 30% of your credit limit, and don’t be fooled into opening store credit cards at different outlets for a few benefits. Any time you apply for credit, you will get a hard check on your account— a hard pull that results in credit being granted can actually improve your score, but hard credit inquiries where credit is denied is a killer to your score. Also, the more credit that is already available to you, the riskier you are as a borrower. On the other hand, if you have a large amount of credit available to you, but you use only a small amount, it will boost your credit rating.
- Be patient: It might take a few months for you to see a difference in your credit score, but it’s all about developing and maintaining good credit habits.
Do you have any other tips to improve your credit score? Share them in the comments section!