Looking to boost your credit score? Whether you’re trying to get approved for a loan, rent an apartment, or receive the best interest rate when you apply for credit cards, repairing and improving your credit can help you achieve financial goals. Follow this guide to learn how to boost your credit score in 5 simple steps.
1: Check Your Credit Report for Errors
The very first step in improving your credit is to check your credit report for any errors. Credit reports are used by creditors, insurers, and potential employers to assess your financial well-being, so your report must reflect the most accurate picture of your financial history. Make sure all information such as personal data, debts, and payment history is correct on your report. If you find any mistakes or discrepancies, contact the relevant creditor or bureau promptly to make sure they are corrected.
2: Pay Your Debts on Time
Paying your bills on time is one of the most important and fastest ways to boost your credit score. This can help you to establish a pattern of regular and timely payments, which is essential for building a good credit history. Set up autopay for recurring debts such as rent, car payments, and mortgage so you won’t miss a payment due date from now on. Also, consider setting aside some cash to pay off past-due accounts if you are able.
3: Lower Your Debt-To-Credit Ratio
Another key way to boost your credit score is to lower your debt-to-credit ratio. This simply means that you should try to decrease the amount of debt you owe compared to the total amount of available credit. An ideal ratio for most people, but having a lower debt-to-credit ratio will have an even bigger positive impact on your score. To do this, focus on paying off any outstanding balances and avoid opening new lines of credit or taking out loans.
4: Dispute Negative Items That are Not Accurate
If any inaccurate or misleading negative items on your credit report are dragging your score down, you should dispute them. You can do this by writing a letter to the credit bureau that holds the information, outlining why you believe it is incorrect. Be sure to include copies of supporting documents that back up your claim if you have them! The bureau will investigate, and if they find that the item is indeed not accurate and updated, your credit score could jump significantly.
5: Avoid Closing old Credit Cards with History
Closing a credit card account can be tempting, especially if you’re no longer using it, feel like having multiple cards adds up to too much responsibility, or think it will boost your credit score. However, this tactic often does more harm than good. Closing an old, established credit card account can hurt your score by reducing your overall available credit and decreasing the average length of your accounts’ histories.