Keys to a Higher Credit Score
Credit scores provide a snapshot of your financial health. Your credit score can affect everything from credit card limits to loans to your ability to rent an apartment or buy a home. A high credit score can indicate to lenders that you are likely more credit worthy while a low credit score can suggest you may be a loan risk.
How to improve your score
There are a few things you can do to improve your credit score over time. Reducing your utilization percentage helps keep your credit score up. Always paying bills when they’re due, keeping a modest balance on your credit cards and paying more than the minimum due each month will help with your credit utilization.
Build your score for the future | There are 4 key things you should do to grow your credit score for long term credit health.
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1. Pay your bills on time
Paying your bills on time accounts for 35 percent of your credit score. Stay on top of your bills by creating a calendar for tracking when your bills are due. You can also enroll in auto bill payments with online banking tools to avoid paying bills late.
2. Don’t max out your credit
Keeping your account balances low can help raise your credit scores. Your credit utilization ratio is a major factor when determining your score. You can estimate this ratio for each of your accounts by dividing the amount you owe on each account by the amount of the credit line.
3. Keep track of length of credit history
The length of your credit history accounts for 15 percent of your scores. You should open and maintain one or two major credit cards. Don’t close accounts, particularly those that you’ve had for a longer time. Maintaining accounts in good standing for an extended period of time is an indicator that you’re responsible with your credit.
4. Manage new credit and types of credit
10 percent of your FICO score is based on new credit. Opening multiple accounts within a short time can signal financial problems. A mix of credit types, new and old, is preferable to having only one type of credit. Credit cards, education loans, vehicle loans and home loans are examples of types of credit.
Thank you LendingTree for sharing this credit tips.