Are you stuck with a bad credit score as you struggle to manage your credit? Here are 5 tips to help you improve!
Download a credit managing app- There are many reasons your credit score may be low. Luckily, because of new (and free!) technology, you can easily organize your credit score with apps such as Credit Karma or Capital One CreditWise. These apps track, monitor, and protect your credit. They provide credit reports and suggest fixes to improve your score, all personalized to you! They will even help you understand your credit so you can make smarter choices with spending in the future. See Top 5 Apps to Manage your Credit.
Pay bills in a timely manner- Making sure your payments are on time and don’t exceed deadlines is a foolproof way to improve your credit score and prevent it from dropping in the first place. Payment performance with ALL bills, not just credit card bills and loans, will ensure that you maintain a stable credit score. Even paying really late overdue bills will improve your score over time, so paying bills in a timely manner is a great first step.
Pay off debts- How you utilize your available credit is extremely important for improving your credit. Your credit utilization percentage should be under 30% for it to look desirable to lenders. Minimizing and paying off your debt will make sure your percentage stays low. It will also improve your credit score and make you look punctual and reliable to money lenders.
Keep low balances on cards- Another important way to stabilize your credit utilization percentage is by keeping low balances on credit cards. For example, opening a lot of cards but keeping a very low balance on each of them will be more beneficial to your credit than keeping few accounts but exceeding or maintaining a high balance on the cards. This is because of your percentage- if you close cards or maintain high balances then your percentage will be higher and your credit score lower.
Only open new credit accounts if absolutely necessary- On the other hand, having too many credit accounts can also harm your credit score. If you open too many accounts, you may be tempted to spend more money and end up overspending. You may also add hard inquiries to your credit reports, which will negatively affect your credit score and last on your reports for two years. Being frugal with your credit accounts is vital for improving your credit score as you will avoid accumulating too much debt.
