A Few Tips On Increasing Your Credit Score

I remember the first time I ever got a credit card. It was the best worst day of my life. It was the day that I was able to buy things I couldn’t afford that came with the bills I couldn’t afford to pay back.

Sound familiar? Well if you were anything like me, you went out of control when you got access to money that wasn’t yours – aka credit. I had taken on more debt than I could manage and as a result my credit score ended up dropping.

Not understanding the consequences of a low credit score I eventually found myself paying more interest when I wanted to borrow more money. Years later, I sat with a financial advisor and they advised me the following tips to help improve my credit score. I hope this serves you just as much as it served me to help increase my credit score.

  1. Pay your bills on time: Sounds simple enough doesn’t it? That’s because it is. At least until you start swiping your credit card like there is no tomorrow and the minimum payments increase dramatically. Make sure you keep in mind that the more you spend; the more you have to pay back. Setup automatic payments from your checking account to your credit cards so that you won’t forget to make a payment on time. Your payment history makes up 35% of your credit score.
  1. Do not close your accounts: Regardless of how many cards you have, don’t close the accounts especially if you opened them years ago. This will affect your score negatively since the length of your credit history makes up 15% of your credit score.
  1. Dispute Inquiries: Inquiries are when you go to a car dealership for an example and banks pull up your credit information to try and find out if they will give you a loan. These “inquiries” then pull up on your credit score and basically shows that you have been trying to borrow money for one reason or another. Refrain from making too many new inquiries unless completely necessary. Inquiries stay on your report for 2 years and too many recent inquiries make you look riskier to a bank.
  1. Keep your credit card balances 30% of the max limit or less: If your credit card max is $3000, then the maximum you should limit yourself to using is $1000. Owing your max credit limit or close to it reduces your credit score. This also reduces your capacity to re-pay a loan because you will owe a higher amount every month. Keep reducing your credit card balances as you go so you don’t have trouble making payments on time.The key is to pay off the credit cards with the highest interest rates first. This makes up 30% of your credit score.
credit score
credit score

Check your reports at least annually: By law, you are entitled to a free credit report from all 3 credit bureaus, Transunion, Equifax, and Experian, via www.annualcreditreport.com or the Annual Credit Report Request Form  by mail. 

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Roberto Green Jr
Roberto Green Jr is an avid writer and aspiring author. His work has been featured on The Cover Magazine, Year Up Inc. and MAQTOOB for Entrepreneurs. He is also the founder of Resume Starters where he has helped his clients' find jobs, transfer positions, earn promotions, and gain salary increases through his creative resume writing skills.