Posted on: Dec. 13, 2016 in Debt, Credit Score, Credit

Your credit score isn’t an arbitrary number with no basis. It’s derived from your past behaviors – specifically how you’ve handled your money in the past. If your score is low, whether because you haven’t used credit much before or because of a few missteps, it is possible to raise it back up. There are some steps you can take to improve your score. It will take some time, but it’ll be worth it.

  1. Keep your credit card balances low. Ideally, your balance will not be more than 30% of the total amount of credit available to you. While that may not be possible, keep working toward paying down the amount you owe. As you do so, your score will go up.
  2. If you have several cards with small balances, pay those off first. The more cards you have with balances, even if they’re small, the lower your credit score will be. Fewer balances will make for a cleaner credit report.
  3. When you’ve successfully paid down a debt, don’t automatically close the account or attempt to have it removed from your credit report. Keeping evidence of your successes will make you more attractive to possible lenders.
  4. Pay your bills on time. This may seem like a no-brainer, but missing due dates is unfortunately common. Not only will you pay late fees, but your creditor could raise your interest if you miss payments. Each late payment can also appear on your credit report, making you appear unreliable.
  5. Avoid using your credit card for cash advances. First, the interest rate on this type of transaction is often higher than for regular charges. Second, creditors may consider this to be a risky behavior, leaving them wondering if they should extend additional credit to you.

Sometimes life doesn’t leave much room for options, leading us to make choices we wouldn’t ordinarily make. However, when you’re able to make these better choices, you’re credit score is more likely to go up!

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