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9 Tips to Improve Your Credit Score - One of the key indicators of your financial  health is usually your credit score. Your credit score will tell lenders right  away how responsibly you use credit. The easier it is for you to get approved for new business loans or lines of credit, the better your credit score is.

Additionally, a higher credit score can give you access to low interest rates when you borrow money. There are a number of quick and easy things you can do to raise your credit score.

Source: by Dylan Gillis

Although it might take some time to see a change in your credit score, you can start working toward one now with the help of the following advice.

1. Review Your Credit Reports

Checking your credit history can really help you  understand what might be working in your favour or against you financially. After obtaining a copy of your credit report, examine each report to determine what is boosting or detracting from your score.

A history of on-time payments, low credit card balances, a variety of credit card and loan accounts, older credit accounts, and few credit inquiries are all factors that raise your credit score.

Major factors that hurt a credit score include missed or late payments; high credit card balances; collections; and judgments.

One afternoon is really all  you need to do this. Hence, regularly checking your credit report for errors is a good idea, but to avoid harming your score, make sure to only make soft inquiries.

Check with your bank to see if you can sign up for their service so you can receive alerts whenever your credit score changes; many banks offer free credit monitoring to their customers.

And after doing this, you will be up to date with your credit score and now you can work to improve it if need be.

2. Pay credit card balances strategically

Your credit utilization is the percentage of your credit limits that you are currently using. Paying off your credit card balances in full each month is the simplest way to keep your credit utilization under control.

Plus, using less than 30% of your credit limit on any card is a good rule of thumb to follow; the less you use, the better. Then, you can work to reduce that to 10% or less, which is recommended for improving your credit score. 

Since your credit score is determined by the amount of your balance when the card issuer reports it to the credit bureaus, you should make sure it is low.

Paying off the balance prior to the end of the billing cycle or making multiple payments throughout the month to always keep your balance low are simple ways to accomplish this.

This approach has a significant impact because timely payments are the most important aspect of your credit score, which also considers your credit utilization.  

If you think you'll forget to make the  payments on time and need reminders, you should set calendar reminders to log in and  make payments.

You may also be able to add alerts to your credit card accounts to be informed when  your balance reaches a certain level.

This method operates quickly. As soon as your credit card reports a lower balance to the credit bureaus, your score will be calculated using that lower utilization.

Requesting a credit limit increase is another way to lower your credit utilization ratio. As long as your balance stays the same, increasing your credit limit can improve your credit utilization.

The majority of credit card issuers let you submit an online request for a credit limit increase; all you'll need to do is update your annual household income. In less than a minute, you might get your higher limit approved. You can also call in and  ask for an increase in your credit limit.

If you really want to improve your credit score? Then this is a tip you can most  definitely follow up on and use.

3. Pay bills on time

If you have late payments, no credit  improvement plan will work. Even worse, missed payments can be kept on your record for up to 7 – 8 years. Call the creditor right away if you are late by 30 days or more with a payment.

As soon as you can, make a payment and inquire as to whether the creditor will stop reporting your late payment to the credit bureaus.

Even if the creditor refuses, it's still important to pay the account in full as soon as possible. Your credit score suffers each month an account is marked as delinquent.

As you can see, your credit score is mostly  influenced by your payment history. For this reason, it’s better to pay-off debts, to avoid them staying on your record; hence, it works in your favour if you repay the debts in time. How quickly you've missed payments in the past affects how quickly it works.  

Additionally, the payment's lateness is important. Fortunately, the effects of late  payments diminish over time, and increasing the number of good credit records can hasten this process.

So, avoiding late payments at all costs is a straightforward way to improve your credit score. Making a filing system, either on paper or digitally, to keep track of monthly bills is one way to do that.

Creating due-date alerts  will notify you when a bill is approaching. Automating bank account payments for bills. As an alternative, you can charge some or all of your monthly bill payments to a credit card.

In order to avoid paying interest, this strategy assumes that you'll pay the balance in full each month. If you choose this route and establish a history of on-time payments, it may make paying your bills easier and improve your credit score. Remember to always pay your bills on time and avoid debts that aren’t paid for.

4. Limit your requests for new credit and the hard inquiries with them

There are two categories of credit history  inquiries, frequently referred to as "hard" and "soft" inquiries. A typical soft inquiry could be something like you checking your own credit, allowing a potential employer to do so, financial institutions you already do business with checking your credit, or credit card companies looking into your file to see if they want to send you pre-approved credit offers. 

Soft inquiries won't have an impact on your credit score. Hard inquiries, on the other hand, may have a negative impact on your credit score for up to two years.

Applications for a new credit card, a mortgage, an auto loan, or another type of new credit, can all be considered hard inquiries. A few tough questions here and there probably won't make much of a difference.

However, a large number of them in a short period of time can harm your credit rating. Banks might interpret your need for money as a sign that you are having financial problems  and pose a greater risk as a result.

Avoid taking out new credit at all costs for a while if you're trying to improve your credit score, although it tends to increase your total credit limit.

Yes, removing hard inquiries from your credit report will improve it somewhat, but not significantly. Only 10% of your overall score rating is based on recent hard inquiries.

While you should make an effort to have any incorrect inquiries removed, this action won't necessarily have a significant impact.

5. Become an authorized user

Ask to be added as an authorized user if a  family member or friend has a credit card account with a high credit limit and a solid  track record of on-time payments.

However, to be on the safe side, make sure you can rely on the friend or relative and that the account reports to the major credit bureaus.

The account will now appear on your credit report. The credit limit can improve your utilization. Authorized user status, also known as "credit piggybacking," enables you to profit from the primary user's successful payment history.

The advantage of it is that your credit can improve without the account holder giving you permission to use the card or even giving you the account number. It could have a considerable effect, particularly if you have a thin credit history.

For those with established credit who are attempting to make up for mistakes or reduce their credit utilization, the effect will be less noticeable.

Additionally, you'll need to speak with the account holder you're requesting this favour from and come to an understanding as to whether you'll be given access to the card or simply be listed as a user with permission.

This works quickly because the account can raise your profile as soon as you are added to it and the account owner reports to the bureaus.

If you have trouble with the other methods, this is a method that will be easy to apply so long as the person you want to be an authorized user for has a safe account and is someone you can trust.

6. Keep Old Accounts Open and Deal with Delinquencies

Your credit history's age is important, and a longer history is better. If you must, close more recent credit accounts. Your credit  score's age-of-credit component examines how long you've had your credit accounts open.

Lenders will view you more favourably if your average credit age is older. Don't close any old credit accounts that you aren't using.

Closing credit cards while you have a balance on other cards would decrease your available credit and raise your credit utilization ratio, even though the credit history for those accounts would remain on your credit report. 

That might decrease your  score by a few points. Deal with any unpaid bills, charge-offs, or collection accounts you may have. That includes an account you have that has missed or late payments.

If they are due, work out a plan that will enable you to make proper future payments on time and it’ll improve your payment history going forward, even if it won’t erase the late payments.

Decide whether it makes sense to pay off those accounts completely or to offer the creditor a settlement if you have charge-offs or collection accounts.  

A small score boost could be obtained by paying off charge-offs or collections. Bear in mind that bankruptcy records last for 10 years and negative account information for up to seven years.

7. Consider consolidating your debts

Enrolling in a debt consolidation program may  result in a brief drop in your credit score, but as long as you make your payments on time, your score quickly rises, and you are eradicating the debt that caused you trouble in the first place.

It might be advantageous for you to obtain a debt consolidation loan from a bank or credit union and use it to pay off all of your outstanding debts if you have a number of them.

If you can get a loan with a lower interest rate, you'll be able to pay off your debt more quickly because you'll only have one payment to worry about. This could raise your credit score and lower your credit utilization ratio.

A similar tactic is to combine several credit cards balances by paying them off with a balance transfer credit card. During a promotional period, these cards frequently charge 0% interest on your balance.

But beware of balance transfer fees, which can cost you anywhere from 3 to 5 percent of your transfer's value.

8. Pay down “maxed out “ cards first

If you are a person who has multiple cards, it’s advisable to pay off the card with the highest credit utilization rate first, especially if the balance on one or more of them is almost at the credit limit. Through this method, you’d have enabled yourself to have an increase in your credit score.

9.Quick loan shopping

If you have bad credit and are unable to find another way to raise your score, you might want to think about applying for a "quick loan." 

These are typically small loans that have their repayment histories reported to credit bureaus, which can help your credit score. But  only as a last resort should you use this.

A good goal to have is raising your credit  score, especially if you intend to apply for a loan to finance a significant purchase or  
for business purposes.

When you start making changes to improve your score, it may take a few weeks or even months before you start noticing a difference, but hang in there and be patient to see results. 

I hope this has been useful to you and that you can put these ideas into practice with happy outcomes. Thanks for reading and Until next time.

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