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- Monitor your credit: It’s difficult to improve your credit score if you don’t know what it is to begin with. There are many sites that offer a free credit report yearly and other sites provide you with your score from each of the three bureaus as well as daily credit monitoring so you are notified about any changes in your score as well. Some sites even let you know how your score might improve if specific actions are taken.
- Correct any errors: After looking over your credit score, you may find an error. Some errors may be simple office mistakes and others may be something more serious such as identity fraud. In fact, in 2012 alone, 52 million Americans had errors on their credit report according to the FTC. If an error is found, contact the credit bureau that the error was found in.
- Lower your credit utilization ratio: Aside from correcting any errors found and making payments on time, it’s also important to not use too much of the credit available to you. Having credit available to you is a good thing, however, using a high percentage of that available credit will be reflected negatively on your credit report. To help keep this ratio down, don’t close old credit accounts, even if you no longer use them. Make an effort to not max out credit accounts. If you don’t have very much credit available to you, try opening a new credit card with a low APR; many credit cards offer 0% APR for the first 12-18 months. If you don’t think you will be approved for a credit card, avoid applying for one since an inquiry into your credit history may slightly lower your score in the short term.
- Be aware of balances and payment due dates: Always know what your account balances are and when the payments are due. Making late payments definitely lowers your credit score and if you are delinquent on an account, try to start making at least the minimum payments as soon as possible. If you are paying off a credit card and paying a lot of interest at the same time, try transferring your balance to a card with 0% interest.