Simple Ways to Improve Your Credit Score

Most consumers are aware of the impact of a bad credit score. It becomes a roadblock for receiving loans, applying for apartments or buying a car. Luckily, there are some ways to improve your credit score and ease barriers along the way.

Know your score

The first step is knowing your starting point, so you need to find your credit score and decide the next steps for better credit. Most banks offer a credit report, or you can receive a free credit report a year from each of the three major reporting agencies. These reports help analyze behaviors and address any errors on your credit.

Make frequent payments

Having a large payment at the end of each month is intimidating – especially when it becomes multiple large payments. Luckily, you can make smaller payments throughout the month to avoid large bills at the end of every month. It helps keep your budget in check while slowly raising your credit score over time.

Set up payment reminders

If you do not want to make multiple payments over the month, you may want to set up reminders to pay your bills on time. Many apps or even a traditional calendar could keep you on track for your payments throughout the month. And your credit score dramatically increases as you pay on time and consistency over a few months.

Focus on your high interest or “maxed out” cards

While you should make payments each month, there is a way to maximize your money. Focus on paying off your credit low on high-interest credit cards and other loans. Then, make sure to lower your “maxed out” credit cards in order to reduce your credit utilization rate, the amount of credit you’re currently using divided by the total amount of credit you have available.

Keep credit cards open.

It sounds counter-intuitive to keep credit cards open, but if you begin to close credit cards, you may influence your credit utilization rate. It eventually leads to a lower score. If you feel like you need to close an account, try to close newer accounts since older accounts establish a credit history.

Struggling with a lower score is challenging, so your best strategy is to pay your bills on time and consistently. If that becomes overwhelming, you may need to look into other strategies that help you reduce debt and improve your credit score in the long term.