Your credit score represents your financial reputation. Those with high scores are rewarded with fast loan approval, lower interest rates, and overall credibility. For those struggling to rebuild their credit, below are a few easy ways to make the most of your efforts:
Pay your bills early. Make your credit card payments before the bill arrives. Not only will you save money by accruing less interest each month, you will also decrease your debt-to-income ratio by paying off your balance more quickly. Paying down debt is one of the fastest ways to see your credit score improve. While paying your bills early may only yield a few dollars in monthly savings, your healthy credit score will reap more significant benefits.
Use older accounts. The length of your credit history represents 15 percent of your credit score, so it is important to keep your older accounts open and active. Many people close old accounts they no longer use, thereby making their credit history look shorter than it actually is. Avoid this route and make use of your older credit cards, even if you only use them once or twice a month. Credit longevity can only help your score, so take advantage of the history you have acquired over the years.
Maximize your utilization ratio. Do you have multiple credit cards, but only find yourself using one or two? This could hurt your score if you keep it up. As a rule, credit health means never spending more than 25 percent of your credit limit on each card. Keep your utilization ratio even by distributing your monthly spending across accounts. For example, designate one card to be used for groceries and another for supplies. This will allow you to spread out your spending and stay below the recommended balance for each card. While you won’t be spending less each month, diversifying how you spend can improve your score.
Additional Resources. The tips above are just a few ways to improve your credit score, and there are many more out there. Are you looking for a way to dispute negative items on your report? Are you unsure of how to diversify your credit portfolio? Working with a legitimate credit repair company may be the best option. I would highly recommend Lexington Law, who has over 20 years of experience working with people to rebuild their credit.
Visit their website for more information about how they can help you achieve your credit repair goals. You can also hear from some of their client testimonials.
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