How To Increase Your Credit Score
Whether you want a loan to make a big purchase such as a home, a high credit score may give you an advantage. It not only helps you secure a lower interest rate and save money over the life of your loans, it also demonstrates to lenders that you’re financially responsible.
Great credit is within reach, if you follow these timeless tips:
- Always pay your bills on time. The simple act each month will build great financial habits that will pay off over the long run.
- Keep your balances low. Credit issuers often report your balance to the credit agencies on a certain date, typically the last day of your billing cycle. Consider paying all or part of your bill before the closing date so the issuer will report a lower or zero balance.
- Maintain a credit utilization ratio of less than 30%. Simply put, your balances make up 30% of the total amount of credit available to you. If you’re like to increase your credit score faster, lower your credit utilization ratio to less than 10%.
- Tackle your debt. Start with the highest interest rate card or loan. Once that debt is gone, pay down the balance with the highest interest rate. Continue the process until you’ve paid off all your existing credit card and loan debt.
- Avoid using your credit cards to pay for large purchases. While credit cards make it easy and convenient to buy what you want, the compound interest can add up quickly and work against you if you don’t pay the balance off in a timely manner.
Looking for more?
