3 Easy Ways to Boost Your Credit Score

It’s no secret that your credit score is an important number to know. Sure, it impacts whether you are approved for a credit card. But it is so much more than that! Your credit score influences your approval for an apartment lease. The security deposit on your utility bills. The premiums on your insurance plans.

The interest rate on your mortgage or car loan. It can even determine whether you get that new job. A high credit score is a sign that you are a reliable borrower and know how to responsibly manage your finances. These three tips will help you boost your credit score to get there.


1) Pay off your credit card every month.


This is the number one rule for responsible credit card spending. The bottom line is this: If you never carry a balance, then you never have to pay interest on your credit card debt. Here’s how it works. Your credit card company will give you the option to pay the minimum balance or the full balance at the end of every month.

Stick with me, because this can be confusing. If you only pay the minimum, you will get stuck paying interest on the outstanding balance above that. So, make sure your cards are set to auto-pay the full balance every month.


2) Use your credit availability wisely.


One of the greatest contributors to your credit score is the amount you owe as a percentage of the total credit extended to you. The typical guidance is to keep this ratio below 25% to show credit card issuers that you can responsibly use and manage your credit lines without overextending yourself. If you have a credit line of $10,000, try to only use $2,500 of it at a time.


3) Leave old accounts on your credit report.


Many people are itching to remove old credit cards and loans from their credit report in an effort to “clean it up.” In reality, these older debts lengthen your credit history and boost your credit score. Having a longer credit history is generally positive for your score because it gives lenders more insight into your borrowing habits.

If you have an older credit card that doesn’t charge an annual fee, go ahead and keep it open to boost the average age of your accounts. If you’re just getting started with a credit card, it’s important to establish a history. Keep in mind that it often takes at least six months of data on an undisputed account in order to generate a score for you.


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