How to Improve Your Credit Score | 8 Easy Tips

Excellent credit has many benefits while poor credit has absolutely none! In fact, poor credit can negatively impact your day to day life and prevent you from achieving your goals, such as becoming a homeowner. So if your credit score is below 800 you’ll want to work on improving it. Sure you may qualify for a mortgage, auto loan or credit cards with a lower credit score, but the higher the score the more benefits, like lower interest rates.

How to Improve Your Credit Score 8 Easy Tips

What is a Credit Score?

A credit score is a number, ranging from 350-850, that’s based on an analysis of a person’s credit file and represents their creditworthiness. Credit scores are calculated on five critical pieces of a person’s financial data; Payment History (35%), Amount Owed (30%), Length of Credit History (15%), Types of Credit (10%) and How Much Credit (10%). These scores are primarily based on a credit report sourced from one of the three major credit bureaus; Equifax, Experian and TransUnion.

8 Easy Tips to Improve Your Credit Score

1. Review Credit
First and foremost you’ll want to review your entire credit report line by line to make sure it’s accurate. If you find information that’s not correct make sure to take the proper steps to get it corrected. Unfortunately, this isn’t always an easy process and can take time to see items corrected/removed from your credit report.

How does your credit score stack up2. Pay On Time
Make all of your payments on time, even better pay before the due date and pay in full. If you don’t pay your bills on a specific day, like the 1st of each month set up an auto reminder to ensure you don’t forget and are never late.

3. Catch Up
If you have fallen behind on payments you’ll want to catch up as soon as possible. If you aren’t able to pay contact the creditor to see if you’re able to make arrangements. While this isn’t going to increase your credit score it may help keep it from falling even further.

4. Pay Off Debt
Don’t expect to max out your credit cards and still have a good credit score. Also, don’t just pay the minimum each month unless it’s a larger loan, like a mortgage, try paying off all of your debt.

8 Easy Tips to Improve Your Credit Score Continued

5. Clear Up Collection Accounts
While clearing up collection accounts may improve your credit score there is a possibility it may hurt it too. This is an area you may not want to tackle by yourself, it’s one I personally recommend getting a professional involved in. Yes, this can cost money, but in the long run it can be well worth it.

6. Stop Inquires
Every time you fill out a credit application your credit score can easily drop, so you need to stop all unnecessary inquiries.

How to Improve Your Credit Score - Don't Collect Credit Cards7. Leave Unused Accounts Open
Credit age is a factor in determining your credit score, so if you have old accounts that you no longer use leave them open and keep the balance at $0.

8. Cash Isn’t Always King
Mixed credit is another component of your score, so if you’re one who pays cash for everything and don’t have any credit cards it could negatively impact your credit score.

With that being said don’t start opening up multiple credit cards assuming it will help. Two to three credit cards is ideal because the more credit cards you have the higher your credit limit will be, which means you have the potential to go into more debt.

Final Thoughts

Your credit score will not improve overnight, it can take time, so be patient. And just because you pay bills on time doesn’t mean you’ll have excellent credit. It is imperative your monitor your credit report, review it for accuracy and always try improving it. Sometimes a person can easily increase their credit score on their own, but for others they may need to hire a professional to help them.

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Additional Resources

  • Understanding Your Credit Report – Eileen Anderson does an outstanding job explaining how to read your credit report.
  • How to Build Your Credit – Building credit isn’t always easy, but Jamohl DeWald shares excellent tips on how to do so.
  • Mortgage Programs for First Time Home Buyers – First time home buyers have a lot of different options when it comes to financing. Bill Gassett has put together the best mortgage programs and what they have to offer.
  • How do Short Sales Affect My Credit Score – Yes, doing a short sale can and will negatively impact your credit score. However, how much will they affect it and for how long? Kevin Vitali answers these tough questions.
  • Mistakes Home Buyers Make – Home buyers can make a lot of mistakes during the home buying process. Sharon Paxson shares the 8 most common mistakes and how to avoid them.

About the Author

The above real estate article “How to Improve Your Credit Score | 8 Easy Tips was written by Michelle Gibson of Wellington Florida Real Estate. Specializing in residential real estate since 2001 Michelle Gibson is experienced in assisting buyers, sellers, landlords and tenants. She would love to share her knowledge and expertise and guide you through the entire real estate process.

We service the following areas; Wellington, Lake Worth, Royal Palm Beach, Boynton Beach, West Palm Beach, Loxahatchee, Greenacres and more. If you are considering selling your home, we welcome the opportunity to work with you and list your home with a top Realtor in Wellington Florida

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How to Improve Your Credit Score | 8 Easy Tips - WellingtonHomeTeam
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How to Improve Your Credit Score | 8 Easy Tips - WellingtonHomeTeam
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Having excellent credit has a lot of great benefits while bad credit can negatively impact your life. Here are 8 ways to improve your credit score.
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ABOUT

Michelle Gibson Wellington Florida REALTORMichelle Gibson of the Hansen Real Estate Group Inc is a full-time REALTOR who has been specializing in Wellington Florida real estate since 2001. This veteran to the real estate industry has expertise in technology, marketing and social media.

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