[A]re you trying to raise your credit score to qualify for a mortgage or car loan? Would you like to get approved for a fantastic rewards credit card? Here are ten things you can do that will improve your credit score over time.
1. Pay your bills on time. Late payments hurt your credit score about as much as anything, so paying your bills by the due date will help it. This is not an overnight solution, but will be reflected each month by small improvements.
2. Reduce credit balances. This is one of the fastest ways to improve your score. Aim for 30% to 50% balances to see the biggest jump.
3. Limit new credit. Even though you are trying to improve your credit history, don’t open too many accounts at once. Choose one to add that you are fairly sure you will be approved for and then make payments on time. New accounts decrease the average age of credit, which can hurt your score.
4. Think twice before cancelling a credit card. Cancelling a card you’ve had a long time will result in a reduction of the length of credit history. Also, if it has a higher credit limit, this will impact the amount of credit to debt ratio and can hurt your credit score.
5. Check your credit report. Make sure everything on your credit report is accurate, especially if it has to do with any loans or credit cards. Review your credit report at least once a year.
6. Understand reason codes. When you are turned down for credit, the creditor has to send you information on why. It is also included on your credit report for why your credit is not as good as it should be. This will tell you what you need to improve on.
7. Turn down credit offers. Don’t take on new credit even with a zero balance when you are trying to get a loan.
8. Don’t increase your credit balance when you are trying to get a loan. You don’t want to look like you need credit.
9. Use credit responsibly. If you have had problems in the past, don’t stop using your credit out of fear. Just make sure to pay off the balance each month.
10. Don’t pull your credit report too often. Even though it won’t hurt your score, you won’t see improvements.
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