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One of the most important things that determine your financial health is your credit score because the lenders will find out about your responsibility through this score. When you have a better or high score, it is much easier to be approved for new loans and the new lines of credit with the lowest available interest rates when borrowing. But is your credit score lower than you’d like? Do you want to improve your credit score? There is nothing much to worry about because there is a number of steps that you can do to bring up the score and improve your position financially. 

Why high credit score is important? 

Surviving with a bad credit score is possible but it is not that easy and not cheap. A high credit score has a lot of advantages as it will help you to save your money and make your financial life easier. If you have an excellent credit score you will get better rates on everything from student and personal loans to credit cards and mortgages. You will have more negotiating power and will get easier approval for rental houses and apartments and also better car insurance rates. Moreover, you will be considered as a lower-risk borrower with banks competing to offer better rates and fees. 

high credit score

A bad credit score will make your life difficult and can delay retirement but cost you more money over a period of time. If you understand how the credit score impacts your life, it will be possible for you to improve your credit score. 

How to improve your credit score? 

It is your credit score that will help the lenders to find out whether you are a high or low-risk borrower. The FICO and VantageScore will range from 300 to 850 and the score of 700 is considered a good credit score. A better credit score will provide you with better interest rates. 

Pay on time

The most influential factor for your score is the payment history. If you have paid on time it indicates that you will handle your future debts responsibly. There is no better strategy to improve it if you pay late because it can stay in the reports for long years. If you have missed a payment by 30 days or more, immediately call the creditor and pay up as soon as possible and ask if the creditor will no longer consider the missed payment in reports. 

credit score

The largest scoring factor in FICO and VantageScore credit scoring systems is paying bills on time. You can prevent missed payments by setting account reminders or considering automatic payments. The speed depends on how many payments you have missed and how recently. When adding more positive credit accounts will help to speed up. 

Low credit utilization

This is one of the biggest factors to indicate your credit score. When using credit, use less than 30% of your limit on any card and it is better if it is lower than that. Make sure that your balance is low when the card issuer reports it to the credit bureaus. You can pay the balance before the billing cycle ends or throughout the month you can pay several times to keep the balance low. 

To do this you will have a low to medium time commitment. Make payments by setting calendar reminders or you can add alerts on the credit card accounts to make you know when the balance hits the set amount. As soon as the credit card reports about your lower balance, it will be used to calculate your score. 

Review credit reports

credit reports

Get a copy of your credit report from the three main national credit bureaus and review each of them to see what is helping to improve and what makes your score low. On-time payments, a mix of different credit card and loan accounts, low balances on your credit cards, old credit accounts, and minimal inquiries for new credit are the factors that contribute to a high credit score. High credit card balances, late or missed payments, and judgments are the major things that will lower your score. 

Use a secure credit card

This is another way to build your credit. This is backed by a cash deposit and you would pay it upfront and the deposit amount is the same as the credit limit. It will be like a normal credit card and your on-time payments will help to build your credit.

Look for cards that will report your credit activity to all the three major credit bureaus or you can consider alternative credit cards that don’t need a security deposit. This may take time because the aim is to build a record of paying on time and keeping the balances low. 

Keep your old accounts open


The older your average credit age will appear more favorable to the lenders. Do not close if there are any old credit accounts that you do not use. Even though the credit history of those accounts will remain on the credit card, closing it while you have a balance on other cards will lower your available credit and will increase the ratio of credit utilization. 

If you have accounts with many late or missed payments find out the past due and work on plans to make the future payments on time. Although this won’t erase your late payments it can still improve your payment history. 

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