Credit scores are very important regarding obtaining loans and getting the best interest rate possible. Is your score lower than you would like? Do you think it’s nearly impossible to improve your score? Think again! Here a just a few ways to get your score to where you want it to be.
What factors into credit scores?
- The easiest way to see an increase in your credit score is to take a look at your credit report and catch any errors that there may be. If an error is found, contact the credit bureau to have the error removed. Some errors may have a large impact on your score while others may leave a small dent but all errors should be taken care of.
- Always pay your bills on time. Â Paying bills in a timely manner makes up a big chunk of your credit score. Late payments can stay on your credit report for 7 years and a skipped payment can bring down your score more than 100 points! If you know that you will be late on a payment it’s always a good idea to contact your creditor and let them know but there are no guarantees that the late payment won’t be reported to the credit agency.
- Another huge component of a credit score is credit utilization. One way to bring up your credit score quickly is to pay down credit card balances, especially those that are near their limits. Ideally, 30% or less of your available credit should be used; if balances are paid down to 30% or less of the available credit you may see an increase in your credit score in as little as 30 days!
- If you are unable to pay down your credit card balances to 30% or less of the available credit, consider looking into a debt consolidation loan which may improve your score.