5 Ways To Greatly Improve Your Credit Score

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Credit matters more than you think it would. Having good credit helps you get loans, mortgages, and auto loans.

You aren’t alone if your credit is terrible. In fact, more than 50 million Americans didn’t have a credit score in 2015.

How can you change this? Our post can help if you want to improve your credit.

Keep reading to learn five ways that can help.

1. Check Your Score for Mistakes

If you think the financial system is perfect, then you are sadly mistaken. Sometimes things get misreported, and you can end up with an error on your credit report.

The FCC estimates that one out of five Americans has a mistake that harms their score.

Make sure to check your score regularly to find errors. A service like Credit Karma will show your score from the three primary score providers.

The quicker you get errors corrected, the sooner your score will start improving.

2. Utilize Your Credit Better

You aren’t going to keep a good rating if your max out your credit cards all the time.

Whenever possible, pay off as much of your cards as you can. Paying your cards off will help minimize any adverse effects a large balance has.

Try not to use more than 30% of your credit card balance. Once you go higher, the average credit score of the consumer goes down at a steeper rate.

3. Get a Loan to Pay Off Cards

If you’re stuck in a situation where you have a hard time paying off your credit cards every month, it might be beneficial to apply for a personal loan.

Income based loans are available that will provide you the cash to consolidate your debt. Doing so can reduce the amount of money you’re paying every month.

This extra cash gives you more free money to use for other things.

4. Keep Old Accounts Open

If you have credit cards that you don’t use anymore, don’t close them.

The age of your credit accounts will play a role in your credit history. Having older accounts that you keep paid off may provide a more favorable impression to lenders.

Closing these accounts also reduces your available credit. This change can throw off your credit utilization.

5. Look at UltraFICO

If you have a thin credit history, UltraFICO is an option that can help improve your score.

Instead of relying on credit, UltraFICO looks at your bill payment history, savings, and banking history.

When you show sound financial behavior outside of maintaining your credit, then you can increase your credit score.

UltraFICO is a free program, so there is no harm in signing up to see if it helps.

Start to Improve Your Credit Today

If you want to improve your credit, you’re going to have to put in the work. You won’t raise it overnight, but with constant effort, you can get a better credit score.

Are you planning to start a new business once you have the credit for financing a loan? Head over to our business section for tips that will help you get started.