3 Simple Ways To Improve Your Credit Score

Having a solid credit score can play a key role in having the ability to borrow money. Sadly, life happens and it can often get messed up over time. If you are fortunate to keep track of everything over time, you will be in a good spot whenever you need to acquire a new loan. However, sometimes even the best laid plans can get hijacked with just one simple misstep. If something does happen, there are some pivot moves you need to do to be able to rebuild it.

1) Paying off/down debt

Yes, this seems to be a simple one, but is by far one of the most crucial. Having open lines of credit and loans with normal payments will help to show a positive record. However, you also have to be able to show that you are paying off or down your debt. Lenders will want to give you money as long as they know you will eventually pay them back. Thus, if you are currently sitting on a ton of outstanding liabilities, you are not going to be looking good to those who may want to give you money.

2) Managing your credit cards

Having credit cards are great when trying to establish a positive growth in your credit score. However, having too much of a good thing can be bad. There are articles on both sides of the idea of having credit cards. Some say you should leave unused credit cards open, whereas others say you should not have unused credit cards open. It comes down to your own situation. For example, we have two credit cards open with minimal balances and very high limits. It shows we carry a low utilization on the cards, thus improving our score.

If you have 8+ cards open with an outrageous limit with 5 completely maxed, you are damaging your score. Even though your utilization rate might be the same as my position, you have a sizable debt which would still negate any positive aspects from have 3+ cards paid off.

3) Monitor any inaccuracies

Managing your score means you have to keep track of it. Although it might add an additional expense to your budget, it might be good to have a credit monitoring service to ensure everything on your report is accurate. If there are items listed on it that are not tied to you, be sure to work to dispute it. Getting errors cleaned off your report can significantly improve your overall score.

Be mindful of tracking your score and rebuilding it. Don’t fall for some of the scams out there which guarantee higher scores in a short amount of time. If you have other questions you can always meet with a licensed advisor to help you setup a plan.