Many people are faced with the challenge of raising their credit scores. While there are numerous ways this can be accomplished, some of them can be performed faster and sooner than others. Here is a summary of 5 easy ways you can improve your credit scores.
1. Eliminate Small Balances
Your credit score takes into account the number of cards you have balances on. Having small balances on multiple cards can knock your scores down over time, so make it a top priority to pay off the small balances on several cards. Limit your use to one or two cards to help protect your scores.
2. Leave Good, Old Debt Alone
Many people, after having paid off a loan, want to get it off their records. Unfortunately, what they don’t know is that having this record of debt can actually be beneficial. If the debt was paid off well, monthly payments came in on time and everything ran smoothly, than this record communicates reliability and can boost your scores.
3. Watch Credit Card Balances
It is important that you keep an eye on how much revolving credit you have and how much you are using. The ticket here is that you keep your percentages low. Even if you are paying monthly, your utilization ratio could be higher than you think. Thirty percent or lower is better for your credit scores in the long run, so be sure you pay down the balances and keep them there.
4. Pay On Time
While it may not show immediate returns, paying your bills on time is one of the best things you could do for your credit scores. Even if you’re trying to save up for a big purchase, damaging your credit scores in order to save a little money now is not worth it in the long run. Your scores will suffer, and it is always harder to return your scores to where they were than to keep them at where they’re at.
5. Don’t Scare Your Lenders
If you’ve missed a payment or your score is on the decline, it’s important that you watch your step. Paying too little or overcharging your account will only take your situation from bad to worse. Consider your options before you make a move that could make you a risk to your lenders and lower your score.