A higher credit score can make a significant difference in your life. After all, your credit score influences the interest rate on your mortgage, car loan, or student loan (and whether you get approved at all). Potential landlords and employers may even check your credit score to confirm if you can make due payments and are responsible, respectively.
You can raise your credit score by taking a few simple steps, such as opening accounts that report to credit bureaus, keeping low balances, and paying your bills on time.
A more detailed list of habits that can improve your credit score are discussed here:
Check your credit score regularly, and review your credit report frequently
Verifying your credit score regularly will let you know right away if you’re making progress or not. You can s Sign up for credit monitoring services, as well as obtain a free copy of your credit report from each major agency once a year.
Pay more than once during a billing cycle.
If you can, pay down your debts every two weeks rather than once a month. This reduces your credit utilization and raises your credit score.
Enroll in credit card autopay.
Suppose you can’t afford to pay off the balance, set up an automatic monthly payment of at least the minimum. If you’re feeling flush, you can always add a second payment, but if you pay the minimum, you’ll avoid a credit-dinging late payment on your report.
Don’t Close Unused Credit Card Accounts.
If you have an old credit card in the back of your wallet that you haven’t used in years, you might be tempted to close it. However, closing an unused credit card account is not always the best option.
Closing an unused credit card account causes it to stop aging, which can lower your average account age and harm your credit. If the account you close is one of your oldest, the consequences can be even more severe.
Thoughtful spending
Reducing the amount of credit you use in relation to your credit card limits (credit utilization ratio) is an excellent way to raise your credit score. Keeping the card open with a $0 balance is generally better for your credit score than closing it entirely.
Quick Loan Shopping
If you’ve tried to improve your score through other means, you may want to consider obtaining a “quick loan.” These are typically small-amount loans ranging from $250 to $1,000, which have their repayment history reported to credit agencies and can appear as a positive on your credit report. This should be used as a last resort.
Good spending habits cannot be overemphasized, and it is always the first step to building a good credit score.