How To Improve Your Credit Score
How To

8 Ways To Improve Your Credit Score

When was the last time you checked your credit score? It’s important for borrowers to understand how their credit score is calculated and how long it takes to improve a credit score.

If you want to know how to build credit, read on. Financer.com has compiled a detailed breakdown with 8 ways to improve your credit score.

How To Improve Your Credit Score

Many articles will give the best tips to improve a person’s credit score, and the formula is pretty simple on paper but a little harder in reality.

It takes some self-disciple and new habits. But it is worth it in the long run.

When applying for finance for investments or property, having good credit is imperative. Which of the following actions will improve your credit score?

Apply all 8 and you will see your number rise in no time at all.

How to Build Credit: 8 Steps

FAQs

Steps

1. Pay Your Bills On Time
2. Setup Automatic Payments
3. Review Your Report
4. Don’t Apply For New Credit
5. Contact Creditors
6. Reduce Credit Utilization Ratio
7. Pay Off Newest Debts First
8. Debt Consolidation
Step 1

Pay Your Bills On Time

Paying your bills on time is a massive factor in improving your credit score. Even paying one day late can do significant damage if done on more than one occasion.

Step 2

Setup Automatic Payments

Set up an automatic payment as soon as the invoice becomes available. That way there is no chance of missing a payment later in the month when you have forgotten about it.

If there is concern about having enough funds in the account each month, there are many actionable ways to gain financial peace.

Open a separate bills account that is not connected to your debit card. Every paycheck transfer enough money to cover regular bills such as utilities, car loans, and mortgages.

For bills that you cannot auto pay set reminders in your phone to pay one day as soon as the invoice becomes available. These little tricks will improve your score over time.

Step 3

Review Your Report

Review your credit report and look for errors that may have occurred. Contact the credit report agency and dispute any mistakes. This can help repair bad credit fast.

Step 4

Don’t Apply For New Credit

Every time an application is put through for new credit, the lender conducts a hard inquiry. Even if the new account is not accepted, it will appear on your credit report for up to two years.

Step 5

Contact Creditors

Contact your creditors if there is a chance that you are going to fall behind on payments. Ask to set up a payment schedule that you can stick to.

This will save your credit score in the long run as long as you make the new agreed payments on time.

Step 6

Reduce Credit Utilization Ratio

If you have multiple credit cards, pay down your most maxed out cards first. This will reduce your utilization ratio and improve your credit score.

Step 7

Pay Off Newest Debts First

If you have acquired multiple debts of small amounts, make a list of newest to oldest debts. Pay off the latest debts first.

This will keep your long term credit history thriving and, in turn, improve your credit score.

Step 8

Debt Consolidation

Merging debts into one larger payment is not always the answer for short term credit score improvements; however, in the long run, it can pay off.

If you can cover all their debt payments monthly, a consolidation loan may be the answer to reducing debt load quickly.

This will improve credit utilization, along with saving money on high-interest credit card payments.

Does paying off collections improve your credit score? Yes, paying off collections will help your credit score over time.

If you have outstanding debts, a consolidation loan may help improve your credit score by limiting the chance of your small debts going to collections.

Having only one repayment to focus on can help knock down your debt quickly. It can also save you money if you find a consolidation loan with a lower interest rate than what you currently pay now.

How To Check Your FICO Credit Score for Free

90% of American businesses use FICO credit scores to evaluate the creditworthiness of a person. There are many ways to check your FICO credit score without damaging your credit.

Regularly checking is an excellent way to keep on top of making decisions that will improve your score over time.

Discover Credit Score Card
The discover credit score card only conducts a soft inquiry that will not affect your credit score. They update their online scores every 30 days, and checking will not cost a thing.
American Express Credit Card
If you are an American Express credit card holder checking your FICO credit score is eas. You will find your score through your online account. It is updated regularly and completely complimentary as part of the American Express service.
Citibank, Bank of America and Chase Bank
All three of these banks offer free FICO credit score checking through your online banking service. Each one is updated regularly, and checking will not affect your credit score.

Maintaining a good credit score is essential to future funding. It is hard to rebuild credit, and delinquencies will stay on a credit report for up to seven years.

At Financer.com we value your feedback. Leave a comment below on ways you have improved your credit score.

FAQs

How long does it take to improve a credit score?

Increases in credit scores take time. To see any significant difference, it may take three to six months of positive credit behavior.

Does your credit score change every 7 days?

Because every lender has its own reporting schedule and policies, your credit scores can change often—even multiple times a day. It’s normal for your scores to fluctuate a little. And keep in mind that you have many different credit s

How long does it take to raise your credit score from 500 to 700?

How Long Does It Take to Fix Credit? The good news is that when your score is low, each positive change you make is likely to have a significant impact. For instance, going from a poor credit score of around 500 to a fair credit score (in the 580-669 range) takes around 12 to 18 months of responsible credit use. 

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    AuthorKimberley Smyth

    Kimberley is the US Country Manager for Financer.com. She has gained years of experience in small business management and has two successful start-ups under her belt. She now focuses her energy on helping others achieve financial freedom through smart money management and investment opportunities.

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    Last Updated: May 11, 2022

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