17 Oct Tips to Improve Your Credit Score
Repairing a bad FICO score takes time. There is no immediate way to fixing a lower credit score. Do you need to hire a credit repair company? No, not necessarily. Do you need to make a plan to pay off debt? Yes. Here are 4 simple tips to improving your credit score.
Cut Back on Charging
The first thing you need to do is to stop using your credit cards. Even if you are paying your balance in full at the end of the month, credit bureaus do not take that into consideration. When putting together your credit score ratio, they will look at your statement’s entire closing balance, not your monthly payments or if you’ve paid that month in full. Try to lower your statement balances and usage of your credit cards to see a larger improvement on your score.
Increase your Credit Limit
Many credit card issuers give you the option to increase your credit line limit without a credit inquiry. Take it. Increasing the percentage of your credit limit will level out your ratio, and help improve your credit score. If the credit card company plans to perform a credit check during this process, then cancel, as this will potentially hurt your score. Check with the company before requesting an increase.
Pay off Debt
Use your credit report to make a list of each account open, payments you owe, and the amount interest they are charging you. Some people move debt around to avoid high interest fees, but transferring debt isn’t always easy to control if you have a bad habit of charging. Paying off your debt is the best way to increase your credit score and it’s the most satisfying! By increasing your credit limit, but only paying off debt, you will decrease the amount of interest charged and improve your credit score at the same time.
Never Make a Late Payment
Even if you are paying a few days late, delinquent payments, and collections have a major impact on your FICO score. Make sure to pay your bills on time. Set up payment reminders and consider setting up automatic payments to be debited from your bank account. Making your payments on time is one of the biggest contributing factors to your credit score. Keep in mind, making the minimum payment does not help your balance in a large way or help keep a sense money management.
If you are having trouble making ends meet, contact your creditors to help with any financial planning. Improving your credit score will take time and patience, and Bank of the Lowcountry is also here to help. Beware of any “quick fix” advice or claims from companies to improve your credit score fast. These can backfire, so make sure to manage your credit score correctly and stay responsible over a length time. It takes patience to boost your credit score properly. If you are in need of credit score advice or setting up monthly payments, please get in touch with us for support!