Finance Globe

U.S. financial and economic topics from several finance writers.
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Best Ways to Improve your Credit Score

Best Ways to Improve your Credit Score

This is the third post in our series about building a bad credit score into an excellent score.

As you continue your quest toward an excellent credit score, you will find yourself faced with a very important question: which steps can you take to improve your score within a reasonable period of time?

While nothing happens overnight, there are some key steps you can take to put yourself on the right path:

1. Pay your bills on time, every time. It doesn’t matter what type of bill you are dealing with, it should always be paid on time. Any delinquent payment can have a negative impact on your credit score. Conversely, paying on time will boost your score and help you feel better about the path you are on.

2. Don’t keep high balances on revolving credit. For most, this means traditional and store credit cards. If you already have a high balance, there is only one thing you can do at this time: continue to pay it down.

3. Open new credit accounts as you see fit (but don’t go to extremes). For example, you should not shy away from purchasing a new car if absolutely necessary. That being said, you only want to apply for and open new credit accounts as needed.

4. Pay off debt as quickly as possible. This goes without saying, but it is a step that many people refuse to take because it calls for a change to their budget. Devise a plan for eliminating each type of debt, one at a time. You may want to start with your smallest balance as a means of making progress and gaining confidence.

5. Review your credit report for errors. If you have ignored this step in the past, it could be the best thing you do in the future. There is a chance that your credit report has at least one error, but you won’t know for sure until you conduct a thorough review.

By following these five tips, you will find yourself in position to improve your credit score.

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Wednesday, 08 February 2023

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