Your credit score is a big factor in being approved for new credit, and if you’re approved for credit, your score can affect your interest rate and loan terms. The higher your credit score is, the better your borrowing power. The lower your credit score, the more impact making a few positive changes can have on your credit score. Here are some helpful tips that can help you boost your credit score.
Catch Up on Your Bills
If you have any past-due bills, the first thing you need to do is get caught up. A single late payment can bring down your score dramatically and stay on your credit report for seven years. Your most recent activity has a greater impact on your score than things that happened in the past, and as time passes, late payments have less of an impact.
Pay on Time
Take your due dates seriously and be sure to pay at least the minimum payment on or before the due date on all of your accounts. If you’ve ever been late because of forgetting to pay a bill, set your accounts up on automatic payments or sign up for email reminders from your creditors.
Pay Down Debt
If you’re carrying high balances on your credit cards, pay them down as soon as you can. Pay more than the minimum payment or make more than one payment each month to try to bring down balances. Paying down your overall debt can have a positive impact on your credit score.
Limit Credit Utilization
Credit cards can make it too easy to buy now, pay later. One of the best things you can do to improve your credit is to pay the balance in full each month on your credit cards. Whenever you charge something, pay it back right away before using the card on something else. Keep in mind that using a low percent of your available credit is good for your credit score. Try to avoid having the balance owed go above 30 percent of your available credit.
Avoid Frequent Credit Inquiries
If you apply for new credit too often, it can hurt your credit score. Each time a potential lender checks your credit report, it’s called a hard inquiry and it shows on your credit report. Having several hard inquiries in a short period of time is a red flag to potential lenders that you may be in financial trouble because you’re trying to borrow money from too many places. It’s a good idea to wait six months or so between credit applications.
Dispute Errors on Your Credit Report
Your credit score can be harmed by incorrect information on your credit report, and errors on credit reports are more common than you may think. Review your credit reports at least annually to check for reporting errors such as wrong balances or accounts reported as late that were paid on time. Dovly is an AI credit engine that can help you dispute any errors you find on your credit report. Try it risk-free with our free membership tier. Get in touch with Dovly today.
