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5 Smart Moves for Improving Your Credit Score

Taking these steps could have a positive impact on your credit score
Kenneth Yang
Kenneth Yang Relationship Manager 3 min read
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A good credit score can greatly expand the horizons of your financial life providing, for example, access to better interest rates and more favorable mortgage terms. On the other hand, a not-so-great score can seriously slow down your money momentum and limit your opportunities.  

What if your score isn’t quite what you’d prefer it be?

Though there’s no quick shortcut from a less-than-stellar credit score to the highly coveted 750-plus “excellent” range, you can substantially improve your number, shore up personal finances and even save yourself some money in the process. Here are five ways to begin that process:

Reviewing your credit regularly and taking steps to improve it can help give your score a boost, and ensure you have better options when you do need credit for major purchases.

Don’t use all your available credit

If you want to improve your credit score, one of the first things you should do is review how much of your available credit you’re actually utilizing. Lenders typically want to see a modest percentage of utilization — preferably less than 30%. If, for example, you have a credit card with a $10,000 limit, you’ll preferably maintain a balance of $3,000 or less. However, your credit utilization applies to all of your credit cards and the balances carried on each. Nerdwallet reports that the 30% rule is more of a guideline, but the less credit you’re using the better as far as your credit score is concerned. You can also ask your creditors to bump up your limit so that your balance is less of the total credit available.

Pay down your credit card balances

Numerous balances on multiple cards can negatively impact your credit score. It’s actually better to put your purchases on one or two cards rather than to switch between multiple cards. To improve your credit score, track down all the balances you have, pay off the smallest then tackle the next smallest, and so on. Alternately, you could consolidate your balances onto one card and work to reduce that overall balance. Going forward, avoid opening new cards at different stores and with multiple companies. Choose a couple cards that work best for you — ideally offering good interest rates as well as perhaps some desirable rewards — and establish those as your go-to cards.

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Pay your bills on time

There are few things more detrimental to your credit score than late payments. Your payment history accounts for 35% of your credit score. If you want to give your credit score some love, make it a priority to always pay your bills on — or even before — the due date. You can simplify the process by setting up automatic bill pay for as many accounts as possible. Also consider establishing an emergency fund so that you have cash on hand to cover unexpected expenses such as a medical bill, car accident or home repair. When it comes to cleaning up your credit, paying your bills promptly is well worth the effort: Late payments remain on your credit report for up to seven years, according to Experian.

Challenge errors on your report

The Federal Trade Commission revealed that 20% of all credit reports contain errors. Given that such errors are not likely working in your favor, identifying and correcting them is critical. Start by reviewing your reports annually. You can request free copies of your report from each of the three main credit bureaus at annualcreditreport.com. If you discover an error, the FTC advises consumers to send a letter or email to both the credit bureau and the organization that provided the information — the credit card company, for instance. The bureau has 30 days to investigate the issue. If they determine that information was, in fact, incorrect, they must send you a new, corrected copy of your credit report. You can — and should — also request that corrected copies be sent to anyone who has received the report in the past six months.

Shop for interest rates all at once

How often you seek out credit is another component of your credit score, albeit the smallest factor. The credit bureaus take into consideration the number of times you inquire about everything from car loans and store credit cards to mortgages or home equity lines of credit. That’s why if you’re in the market for a mortgage, it’s ideal to shop around for an interest rate within the same short time period so the credit bureau will likely take the hint that you’re evaluating your options for one loan — and not constantly looking to take on debt.

Your credit score is a key piece of your financial future. Reviewing it regularly and taking steps to improve it can help give your score a boost, and ensure you have better options when you do need credit for major purchases. 

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The strategies mentioned in this article may have tax and legal consequences; therefore, you should consult your own attorneys and/or tax advisors to understand the tax and legal consequences of any strategies mentioned in this document. This information is governed by our Terms and Conditions of Use.





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