Tips to Improve Your Credit Score

Have you used creditkarma.com to check your general credit score for free lately? Was it lower than expected? In case you need a bit of a boost in the credit score department, feel free to use these four tips.

Improve Your Credit Score Tip #1 – Get Some Credit

It may not sound right, but the best way to improve your poor credit score is by getting credit. A lot of consumers think that closing all of their credit accounts will actually boost their credit and increase their credit rating. But rebuilding your credit requires that you start to build a good credit history by establishing new credit and paying if off regularly, so you may want to open a credit card or apply for a small consumer loan with the express purpose of keeping the balances low and paying them off quickly.  The new credit account will help to create a good payment history and will start to replace some of the bad debts that you paid off via collections.

Improve Your Credit Score Tip #2 – Request a Credit Report

Everyone should review their credit report on a regular basis to see if all of the information listed is accurate and up to date. Credit card bureaus have been known to make mistakes and need to be told when to correct them. It is up to you to notify the credit bureaus of any errors or discrepancies that may be showing on your credit reports.

First, use annualcreditreport.com to check each of your three main reports for free each year – Transunion, Experian, and Equifax. I personally check one every four months. If any of your information is incorrect, file a claim to have this info removed. Remember to check back to ensure that it was corrected. It may take some persistence, but it will be worth it to you in the long run.

Improve Your Credit Score Tip #3 – Reduce All of your Balances

The key to building great credit is to have access to credit that you do not utilize. Paying off your balances and keeping your accounts open will help you to get a top tier credit rating over time. Lenders will see that you have an abundance of credit available that you are not spending. That makes you a lower credit risk and enables you to qualify for the best interest rates.

Improve Your Credit Score Tip #4 – Skip Consolidating your Balances

Debt consolidation may work for those that are on the verge of bankruptcy but it does not help those that are trying to get a credit score boost. The credit bureaus view debt consolidation as a sign of financial mismanagement and may lower your credit score for doing it. If you are on the verge of bankruptcy, your credit score is not your biggest problem. But if you are just a little behind, avoid debt consolidation or your credit score will plummet.

What other tips can you think of for improving your credit score?

Edwin C

Edwin is a marketer, social media influencer and head writer here at Money In The 20’s. He manages a large network of high quality finance blogs and social media accounts. You can connect with him via email here.

2 thoughts on “Tips to Improve Your Credit Score

  • July 25, 2011 at 10:29 am
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    I’ve found that my credit has improved over time not because I’ve done anything differently, but simply because of age. I know that will eventually taper out, but I plan on keeping the same plan of paying everything off each month and never using too much of my available credit each month.

    Reply
  • August 3, 2011 at 3:39 pm
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    The best way to maintain a healthy credit score is to consistently pay your bills on time. One or two missed payments will absolutely kill you, so at least make the minimum payments no matter what.

    Reply

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