Three Tips for Improving Your Credit Score
Maintaining a good Credit Score is extremely important if you plan on trying to obtain credit for any type of loan. The simplest way to maintain good credit is to pay off all of your debts before the due date, though sometimes that isn’t an option. We’ve complied a few tips on how you can get started on the task of improving your credit so it’s in good shape when you need to borrow.
- Credit Utilization – it is generally recommended to keep your balances under 30% of your total credit limit. This is true even if you pay your balance off monthly. It is not necessarily a good idea to open cards you don’t need, but if you are responsible enough to have a larger credit limit on a card and still pay the whole balance off every month this will help decrease your utilization. For example if you use $2,000 of a $3,000 limit that is 67% utilization but if you use $2,000 of an $8,000 limit that is a 25% utilization, keeping you under the 30% utilization recommendation. Check with your issuer to see if increasing your limit will result in a hard inquiry to your credit or not.
- Reduce the amount of debt you owe by paying off accounts with the highest interest rate first.
- Set up reminders so that you make all payments on time. This is one of the biggest contributing factors to your credit score.