5 ways to improve your credit score: these tips are life-saving
Having a strong credit score can help you in many ways. If you need some help to build or rebuild yours, you can count on The Post New. Read this content to get useful tips and reach your goals.
You can build an excellent credit score with the proper strategy: learn how to do it!
Don’t get sad about your damaged credit score because there are many ways to improve it.
We know it’s not a comfortable situation, but in just a few months of working on it, you will see the difference. Cheer yourself up, you have some work to do, and we’ll give you some tips!
How does a credit score work?
The first step to improving your credit score in any way is to understand how it works. It’s like reading the manual to get the instructions. So let’s start at the beginning.
So, a credit score is a three-digit number that ranks a consumer’s ability to deal with credit. It will show your creditworthiness.
If you have a high credit score, it means you’re more likely to pay your bills on time and repay your loans and credit cards.
There is more than one type of credit score, and the exact equation to figure them out is a secret. But we know which factors will have an influence on them and the importance they have.
- Payment history: It weighs 35% on your credit score.
- Credit Utilization: It’s the ratio between your total credit available and what you’re using from it. This represents 30% of your credit score.
- Credit history: Represents the amount of time you possess credit lines. That’s why the sooner you start using a credit card, the better. It’s 15% of your credit score.
- Amount of new credit lines: This factor weighs 10% of your score and goes hand to hand with your credit history.
- Types of credit lines you have: 10% of your credit score is made based on your credit mix.
You should consider all of these factors when it comes to building a strong and excellent credit score. That’s what we’ll about to do with these tips
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A higher credit score can grant you many advantages: good reasons to improve your score.
You might be wondering why you need a better credit score.
But if you knew all the good things in life it can get to you, you would pay more attention to them. Let me tell you a feel benefits of having a good credit score:
- Get approved for credit cards with lower interest rates
- Earn more benefits on your premium credit cards
- Your car insurance will have better rates
- More chances of getting the house of your dreams
- If you have children to put in college, a better credit score will grant excellent student loans
- Your credit card issuer is more likely to give you a credit limit increase if you have an excellent credit score
- Save money with better interest rates and fees on every line of credit you need in your life.
How to improve your credit score: 5 simple ways to do it
You get the advantage of having a strong credit score now, right? So get these tips and put them into action today
1) Start using a credit card as soon as possible
This tip is for the ones who haven’t started their credit history yet. Know that the sooner you start using a credit card, the better. Two reasons make this an important move.
First, you’ll get a longer credit history soon, which is good for your credit score. Secondly, you’ll learn how to deal with credit.
Understand how much of it you can use, remember to pay it on time, and feel the impact of paying interest if you carry a balance.
This will give you the maturity needed to handle more robust lines of credit, such as a mortgage or student loan.
2) Pay your bills always on time – always!
As you’ve seen above, the payment history represents 35% of your credit score. This is the most important factor, so pay extra attention to it.
Every time you miss a due date and delay your credit card bill payment, you hurt your credit score a little.
This goes for every bill, including cable, internet, car insurance, etc. Literally, every bill you delay has the potential to hurt your credit score.
But it is especially critical when it comes to paying down your credit lines. So, whenever you can, put your bills on autopay, so you can’t forget about them.
3) Don’t use your whole credit limit
It’s not just because you have a $10,000 credit limit on your card that you should use all of it. Keep a good ratio between your total credit limit and your credit utilization.
This goes for every type of credit line that you have.
A good way to do this with your credit card is to constantly pay your card balance. This way, you can enjoy the revolving credit without getting too close to your credit limit.
4) Make an effort to pay off your debts
Carrying debt is extremely negative for your credit score. It’s like holding your score on a leash and walking around scratching it on the ground.
We know being in debt is never an easy situation, but make everything in your power to solve your debts as soon as possible.
5) Keep an eye on your credit reports to catch any mistakes
Credit bureaus receive reports from your credit issuers and add them to your credit score report. But sometimes, these reports contain errors. And it is more common than you imagine.
You have the right to ask for your full credit score report once every 12 months. Look for mistakes like delayed bills that didn’t happen or information that is far too old to still be there.
Need some help reviewing your credit report? Ask for professional help!
As tracking your credit reports is very important, it can also be a little confusing. Also, some details can only be perceived by a professional.
There is also the possibility of reviewing your contracts with terms and conditions to see if everything was made correctly. It is also possible to find errors in contracts that invalidate debts.
To get these services, you can talk to a specialized company that works with debt relief and credit improvement.
If you don’t know any, start with The Credit Pros. Take a look at the full review to understand how it works and start your process to get a better credit score.
About the author / Julia Bermudez
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