4 Tips for Raising Your Credit Score

Your credit score is so much more than just a number— it’s a critical element of your daily life. It’s a representation of your financial health as a whole, and can affect your ability to do all sorts of things. It can affect your ability to get a job, or even rent a home. 

Raising your credit score has a myriad of benefits, especially if you’re hoping to buy a home and retire in comfort one day. If your credit score is not currently where you’d like it to be, then here are some of the best tips for bringing it up.

Pay Your Bills on Time

One of the most important aspects of bringing your credit score up is showing lenders that you can pay back your bills on time. If you pay a bill even a few days late, it is not a “good look” to lenders.

Make sure that you prioritize paying your credit cards consistently to build a positive credit history. If this is a problem for you to remember, then consider setting up reminders or automatic payments. The simple act of simply paying on time every month can make a world of difference in your overall credit score.

Lower Your Balance

Your credit utilization ratio to your total credit allowance is very important. In other words, if you max out all your cards then this is going to negatively impact your score. Aim to keep your overall credit card utilization below 30% if you hope to increase your score. Pay off your high interest cards first, and work your way down. Lastly, monitor your spending and avoid accumulating unnecessary debt on top of the debt you already have.

Don’t Open Too Many New Accounts

Although the number of credit cards you have can play a role in your credit score, you don’t want to open too many accounts. A healthy number of different credit cards is favorable for your score, however, opening too many new accounts can be a red flag to creditors. 

A hard inquiry is required every time you ask for a new card, which will temporarily lower your score. This can be a reflection of financial instability, so only apply for new credit cards when necessary. Focus on paying off your current debt and building your credit history and slowly build up your number of cards over time.

Check Your Credit Report

If you’re following all this advice and your credit score is still not budging, then you might want to check your credit report with a watchful eye. There may be errors that are hurting your score. 

For example, you may have an account attached to your name that doesn’t actually belong to you, or an inaccurate payment history attached to one of your cards. Regularly look at your credit report to ensure you remove anything that doesn’t belong there.