If you’re unhappy with the looks of your credit history, you’re not alone. Your credit score may have a significant impact in life; it helps lenders decide how likely it is that you will pay them back on time if they grant you a money loan or a credit card. The higher your credit score is, the more likely you are to qualify for lending. If you have a bad credit score, we’re sure you’re wondering, how can I improve my credit score? While it isn’t easy and certainly not at the drop of a dime (no pun intended), it’s possible to fix your credit score in as little as a few months.
Factors that Affect Your Credit Score and How to Improve It
Some of the most important factors used to calculate and improve your credit score include:
Payment History
As one of the most important factors of your credit score, your record for paying your bills on time is a good indicator of future bill paying.
How to Positively Influence Payment History
You can begin paying all of your bills on time, every single month, to boost your credit score and improve your payment history. If you’re behind on any payments, do all that you can to make them current. If you have the funds, put your bills on auto-pay.
Credit Card Utilization
Credit bureaus factor your credit card utilization into your credit score. This refers to how much of your available credit you have used. Experts advise aiming for 30 percent credit utilization or less.
How to Lower Your Credit Card Utilization
To keep your credit utilization low, make sure to pay off your credit card balance in full each month. If this is unattainable, try to keep your total balance at 30 percent of your total credit limit or less. A 10 percent credit utilization can help boost your credit score even more.
Length of Credit History
How long you’ve had credit and the average age of all the accounts in your credit report amount to the length of your credit history.
Continuing Your Credit History
If you’ve been managing your credit for a short amount of time, don’t open too many accounts too quickly. Newer accounts will decrease your account age, which can have a large impact on your score. Opening many new accounts can also look risky to lenders if you’re just beginning your credit history.
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