Improving Your Credit Score 101

Just like you should be checking your account balances frequently to make sure you’re on track, you should also look at your credit score. If your score goes down, you might be able to pinpoint the reason and make adjustments as needed. 

 

One of the biggest things that affects your credit score is whether you pay your credit card bill on time. Late payments can take a hit to your score, so do everything in your power to make sure that’s not an issue. There’s usually a way to schedule automatic payments so you don’t even have to worry about forgetting to do it yourself. 

 

If you have credit accounts open that you don’t use, it may seem obvious that you’d close them. You’re more favorable to lenders if you have an older credit age. As always, everyone’s situation is different so speak to a financial advisor if you’re unsure what to do with open and unused accounts. 

 

The general rule of thumb is to aim for 30% credit utilization or less. One way to do this is to pay your balances in full every month or at least keep your outstanding balance at 30% or less of your limit. You could consider asking for a credit limit increase which would help your credit utilization as long as your balance doesn’t increase at the same time. 

 

Credit monitoring services are very helpful and lots of them are even free. These services monitor the changes in your credit report over time and can help you figure out what will improve it. One of the best parts about credit monitoring services is that they can help prevent fraud and identity theft by alerting you, for example, when a new account has been opened in your name.