Having a good credit score makes life easier and cheaper. Even if you’ve tanked your credit, we’ll give you some ways to bring the number back up.
You don’t have to wait seven years to start improving your credit score. There are a few tricks to get that number out of the red.
Having a good credit score can save you thousands of dollars over a lifetime. It makes you eligible for lower interest rates for car loans and mortgages. Some jobs even require a credit check.
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The biggest factors in your credit score are:
- Paying your credit card and loan bills on time.
- Using less than 20% of your total credit line.
- Avoiding mistakes that result in bad marks to your score (like not paying your bill on time or going into collections).
You can lower your utilization by asking for an increase in your limit. Don’t close a credit account. It lowers utilization and reduces the length of your credit history. You don’t have to use the card a lot, just put a recurring payment on it to keep it open.
If you have several credit cards, put small, recurring payments on each. More payments across more cards will boost your score. Set them to auto pay so you won’t miss a payment.
Paying on time is the biggest factor for your score so even if you can’t pay the entire balance, pay something on time.
If you have such bad credit or non-existant credit, you can get a secured credit card to start rebuilding or building your credit. You put down a deposit and that amount is your credit limit. After a time, you can switch over to a regular credit card.
A bad credit score isn’t the end of the world but you should do what you can to improve it.
Credit Karma: A free, ball park credit score. A soft check so it won’t ding your score.
Mint: Track your spending.
What Makes Up Your Credit Score: Read more in depth about what goes into a credit score.