Here are seven tips to start building or boosting your credit score:
1. Watch those credit card balances
Revolving credit versus how much credit you are using is one of the major factors that determines your credit score. Generally speaking, smaller credit utilization percentage is good for your credit history. It is a good idea not to utilize more than 30% of your credit limit.
2. Pay off your debt
Your credit consumption ratio compares the amount of debt you owe to the amount of credit you have at your disposal. Lenders want to make sure you’re not borrowing more than you can afford to pay back.
3. Pay your bills on time
What most lenders care about is the likelihood that you’ll pay back your debts. Doing so on time proves that you’re reliable and should boost your overall credit health. That’s why it’s important to make payments on time for everything.
4. Don’t cancel old credit cards
One of the significant factors that determines your credit score is the length of your credit history. Some models may take average age of all your accounts into factor, while others may consider the as of your oldest open account. By opening too many new credit cards simultaneously or closing old accounts, you risk shortening the length of your credit history.
5. Dispute any credit history errors
As consumers, we have the right to an accurate credit report. By knowing the details of your credit history, you can easily dispute any errors by contacting the creditors who have reported you or contact the credit bureau directly.
6. Communicate with your creditors
Although it a not pleasant to talk to with your creditors, you might be surprised at the assistance most creditors provide to their debtors. Therefore, it is always a good idea to talk to your creditors if you are unable to pay off your debt. Many of them have different programs that will help you clear your debt.
7. Start early
Improving your credit history is not an old man’s game. The truth is that it is never too soon to work on your credit history. Anyone who’s older than eighteen can start opening accounts in their own name, which means they can begin building their credit history right away.