A good credit score goes beyond the ability to get a loan at the best terms — it can also save you money on things like utilities, rent or a cell phone plan. Your credit score is calculated using a mix of data, including your payment history, how much credit you have and your length of credit history. Here are steps experts laid out to help improve your score and get back on the right borrowing track.
Know your credit risks
You can review your score for free in a few ways: many credit card companies include it on statements. While it’s not exactly the same number that lenders see, it should give you a pretty good idea of where you stand. But not everyone will provide the risk factors.
Open a credit card if you don’t have one
There’s no need to have a wallet full of credit cards, but having one or two that you use responsibly will help your score. You should apply for credit when you need it and know how you are going to repay it.
Be patient
Good credit scores don’t just happen overnight. For instance, the positive effects of opening and making on-time payments on a credit card could take a few months to show in on your score.
Pay your bills on time, all the time
Your payment history is the biggest factor in determining your credit score. Lenders don’t want to give money to someone who has a history of missed payments.
If you went through a period of time where money was tight and you were late with some payments, it’s time to right the ship. Curb your spending and start a track record of paying your bills on time.
Manage the debt you have
Keeping your balances low will help boost your credit score. Aim to keep your debt utilization — which is amount of available credit you actually use — as low as possible.
You should not use more than 30% of the credit limit. If you are carrying a balance on any of your credit cards, create a plan to get them paid off as soon as possible.
