6 KEYS TO IMPROVING YOUR CREDIT SCORE
1. Never miss a payment (can save you up to 160pts!)
This is the easiest way to kill your credit. If remembering to pay your bill is your problem, ask your credit card company about signing up for their automatic bill pay program. If you cannot financially pay your bill, talk to the credit card company about setting up a payment program. Also be sure to stop purchasing things with your credit card, and set up a strict budget to outline your spending and to plan your credit card payments.
2. Instead of getting a new credit card, extend your credit limit on cards you already have
If you are someone who is likely to be tempted to go on a shopping spree if you were given a new credit card, then entirely avoid getting a new credit card! Instead, extend your credit limit on the cards you already have. And remember: now that you have more credit available after extending your credit limit, this does not mean you can, or should, buy on that additional credit! Instead, reserve that amount for any emergencies that may come up (e.g., a home or car repair, a doctor bill).
3. Never use more than 20% of your Available Credit
Not only does keeping your spending down help you avoid paying interest in the long run, but keeping spending down also shows that you have extra credit available. This could help you get approved for a loan faster down the road and also qualify you for a lower interest rate in the future!
4. Get credit cards that have cash back rewards to contribute to your balance
Cards that have a cash back rewards program are very helpful. As long as you responsibly purchase only necessary items with your credit card, you are essentially being rewarded for shopping! Your cash back rewards can be put towards your balance, which helps you pay off your bills. But again, be very careful!! A cash back rewards bonus can make it very easy to start spending just to increase your cash back rewards. So be cautious
5. Finance a vehicle (or any big ticket item)
Making payments on a large priced item shows that you are able to manage and pay off debt. Financing your purchase for as long as possible will also help, as it shows that you can pay off a long term debt. This way will make you pay more in interest, but you will have lower monthly payments and increase your credit score.
6. Take out a small personal loan and repay it over a year on time
This is a great way to boost your credit score. It shows banks and loan companies that you are able to pay off a loan, too, which can help you get approved for a loan with a lower interest rate down the road.