How to increase your credit score

A credit score is a three digit number that tells someone how likely you are to repay a debt or a loan. Banks and lenders decide on whether they should give you the money or not based on your credit score. So it’s good to have a high credit score. However, it is not that easy to increase your credit score. It won’t increase over night. Here are some steps to increase your credit score.

Watch out for your credit card balances

You should keep a watch on your credit card balance and how you spend. Your credit score depends on how much credit you have vs how much you are using. The percentage should be low for a good credit score. So, when your balance is less, you should spend accordingly, this is not just for the sake of saving your balance, but to also keep a good ratio.


Eliminate credit card balances

John Ulzheimer, a nationally recognized credit expert said, “A good way to improve your credit score is to eliminate nuisance balances”. Those are the small balances you have on a number of credit cards. One of the major things that your score considers is just how many of your cards have balances. Hence, spending some amount in one card and something some amount in another account instead of using the same card, can hurt your score. The solution to it is by paying off all the small balances you have.

Pay up on time

The biggest point in a good credit score is monthly on-time payments. If you are bad at paying up your debts or paying them on time, it has a chance to bring your score down. This normally happens when you buy something which is worth a lot, like a vehicle, or a home. You have to make sure that you will be able to pay it every month and make sure you don’t miss out on the payments.

Don’t try to remove your debt history

It is a common misconception that having old debts in your credit report is bad. The minute some people are done paying up their debts, they immediately try to remove it from their credit report. Negative items are obviously bad for your credit score and most of them will be removed from your report after seven years. Good debt, on the other hand is beneficial for your credit score. Good debt means the debt that you have handled well and paid off. They might have a huge hand in increasing your credit score.

These are some of the things that would help in increasing your credit score. Keep in mind that it is not a fast process. It is a gradual one. You can keep these in mind while handling your credit score.