tips for improving a credit score

We all know that the most important thing that banks and other lenders look at is our credit score. It tells them about our credit history and what kind of borrowers we are. No matter where we apply, this is the first thing that they ask for. The better our credit score is the more facilities we can enjoy. These facilities can include premium credit cards and low-interest rates, among others. Everyone tells us that we have to keep our credit scores good, but that is easier said than done. Improving your credit score is not something that you can do overnight. You have to really work hard at it. Consider it as a marathon and not as a single sprint. This means that improving your credit score is a slow and steady process.

You have to keep an eye on your credit score so that you know how much improvement you need to have and how much better you need to make it. Here are some tips that can help you improve your credit score.

Stay On Top of Payments

If you have any debts, then you have to make sure that you make all your payments in a timely manner so that you can show the lenders and other institutions that you are a responsible person. According to Experian, the most important factor that most scoring factors look at is your payment history. The more you pay your payments on time, the better it will reflect on your history. As far as lenders are concerned, the better your payment history is, the more they can relax and trust you. Good payment history means that you will immediately be approved for a loan whenever you apply and that the interest rates will be low.

That is why you need to make sure that you don’t make your payments late or default a payment. This also means that you don’t face things like repossession or foreclosures as well as third party collections. If there is something on your credit score history that might show you as a liability, then it will harm you.

Know your Credit Utilization Rate

Make it a point to know just how much credit you can use and ensure that you never cross the limit. That is a practice that tells the lenders that you might be a risky investment. The lower your credit utilization ratio is, the better it is going to be for you and the more score you will earn in that category.

Out of all the categories, the credit utilization rate is probably the most important and the most influential category in your credit score. Depending on the scoring system, the ideal rate that you must have can change. It could be up to 10 percent in one scoring system and in another scoring system, it could be less than 30 percent. This means that you need to keep your credit utilization rate below 10 percent or 30 percent, respectively if you want a good credit score.

Apart from your credit utilization rate, the date that your report is presented to the credit bureau can also have an effect on your rate. Again, like the point discussed before, different scoring systems have different ways that your credit utilization rate report affects your overall score. Make sure that you know if the report differentiates between those people who carry balances from month to month and those who pay in full.

Leave old debts on your report

Your credit score history contains everything that you have done in the past. This includes your student loans as well as any other loan that you might have taken like an auto loan. Most people are very eager to have these loans removed from their reports. After some time has passed and the report gets updated, old loans can be wiped off, but don’t be in a hurry to do that. If you have made timely payments and your loan is now complete, then that is a good thing for you and not as bad as you think it is. This just might end up helping your score instead of damaging it as you think. The same is true for your credit card accounts. If you have a credit card account that has been completely paid off, that is a good sign for you. if your report shows that you have a long history of credit card usage and that you have an impeccable track record of paying all your debts and bills on time, then lenders will look at it as a favorable thing. This shows that you are a responsible person who they can trust and take a risk on.

If you have bad debts then as time passes, they will be removed, and you won’t have to worry about them anymore. For example, if you have ever been bankrupt, then that will stay on your history for a decade and then it will be gone. If you have made your payments late and have faced things like foreclosure, repossession, or collections, then that will take seven years to be completely gone.

Take advantage of score-boosting programs

If you have a limited history of credit taking, then that might put you at a disadvantage as compared to someone who has a long history of timely payments. The number, as well as the age of your account, are two things that affect your credit score and they tell the lenders how good or bad you are at taking care of your debts. There are different programs that help you boost your credit score by allowing different financial information to help improve your thin profile. Make sure that you take full advantage of these programs. Through these programs, you can add various financial information to your scores like your online banking data as well as your utility bill payment history and your telecommunications history. These programs can also include your checking and savings accounts.

Time your applications carefully

Your credit score history contains everything that you do, including the fact that you have applied for a new line of credit or if you have made a hard inquiry. This can potentially decrease your score, but not permanently, this affects you on a temporary basis. This might stay in your history from 6 months to a year. If you are applying for a new line of credit, then you have to make sure that you do your research and that you know that you will get approved. A rejected application is not something that you want to have in your history.


If you keep your payments on time and your credit card balance in the mid-level range, you will be able to apply for credit whenever you need it. Just keep the above tips in mind to keep your credit score good, and you will not be rejected in the future.

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