At some point almost everyone has worried about that missed payment they had a few months ago, or the maxed-out credit card sitting in the nightstand drawer. But don’t worry, there are ways to repair or improve your credit score. Your score can change from quarter to quarter and is based on your most current credit report.
Six Steps to Improving Your Credit Score
- Check your credit report – look for inaccuracies or fraud.
- Keep your debt to credit ratio controlled – the ratio between the amount of debt you have and the amount of credit available can be a big weight on your credit score. Canceling old, paid off, or unused cards does not help your debt to credit ratio. In fact, keeping them around can help boost your credit score.
- Get some credit going – your credit score takes time into account so the longer you have had credit, the better, so long as it’s under control.
- 25% rule – to help with your credit score, try to keep the balances on your credit cards at 25% of the available credit. If you can’t manage that, try to at least keep them under 75%.
- Pay your bills on time! This is the best thing you can do to improve and repair your score.
- Some credit, but not a lot – it is not a good idea to keep opening new credit lines just to improve your debt/credit ratio. Some lenders may see this as sign of financial instability.