12 Tips to increase your Credit Score – A Guide for all consumers
Is it possible to boost your credit score?
Yes, there are a lot of opportunities to boost your credit scores easily. Your credit score could bring a major impact, whether your landlord approves the rental plan, when and how much you will pay in the home etc. The higher the credit score, higher the rate of saving money. If your credit score is low then Top 10 credit cards will help you in boosting the score in future.
Here are the 12 simple tips to boost your credit score:
- Pay bills on time: Research says about 35% of your credit score is evaluated from your history of payments. So higher the credit score will be if you pay the bills on time. Take a look at all your payment history and make sure you pay it on time if you dint.
- Use one account at a time, don’t open a lot of new accounts: Every time you apply for a new account or a credit card the lender checks your score and credit report to decide if it should be extended or not. This makes the lender inquire more about you and check if you are a bigger credit risk. It also brings an impression that you are desperate in getting credits. Hence it is good to minimize to apply for new cards often.
- Limit the sources of hard inquiries: Applying for a new card is not only the way to collect information for hard inquiry. Many financial lenders and companies will pull your available report before taking decisions to lend money.
- Minimize your credit utilization rate: The second major component in determining your source is credit utilization or the percentage of your available credit. Better your credit score lower your utilization rate. You can also calculate your utilization rate by dividing your total credit balance by your credit limit. A good credit utilization rate is between 1-20 percentages.
- Seek higher credit limits: The best way to lower your utilization rate is by increasing your credit limits from the credit card lender.
Normally these limits are increased by three ways
– Your card issuer will automatically increase it based on the usage.
– You can request to increase it
– You can transfer the limit from one card to the other if both the cards are from the same issuer.
- Plan your spending: Always be planned and organised in your spending. If you were denied higher limits switch to cash and cut unnecessary expenses. Track your spending and avoid temptations.
- Always bay bills fully: Though there is no direct connection in paying the bills fully ensure that there are no outstanding payments. Avoid the interest payments.
- Have your old accounts open: About 15% – 20% of your credit scores come from the period of usage of your credit cards. Closed accounts will remain for 10 years even if it is with good standings.
- Use your old cards too: Use all the cards equally based on the benefits. The issuers might close the inactive card accounts. These limits will not be factored into utilization rate and could lower the score.
- Pay off Student loans: Credit score can be increased by paying the student loans on time.
- Avoid derogatory marks: Avoid negative records, bankruptcy and other civil judgments which are a perfect example of mismanaged credits.
- Pay your fines: an unpaid fine like the parking ticket, library fine could bring a major impact on the credit score.