If your credit score is below where you’d like it to be, you can improve it by taking several simple steps. These strategies may not increase your scores immediately, but over time they can make a real difference.
The two most important factors in a credit score are payment history and how much debt you have compared to your available credit. The first of these is the most controllable, and it’s essential to pay your bills on time. Even a single late payment can drop your score by 100 points or more, so it’s critical to avoid missing payments.
It’s also a good idea to keep your balances low on your credit cards and other lines of credit. Credit utilization is about 30% of your credit score, and this factor is influenced by how much you owe versus the amount of your total available credit. Paying down your balances is one of the most effective ways to raise your credit scores, especially revolving debt such as credit card debt.
The length of your credit history (15%) and your credit mix (10%) are also factors that influence your score. Lenders prefer to see a long credit history and a diverse range of accounts, including revolving (credit cards) and installment loans such as mortgages and auto loans. However, applying for new credit just to improve your credit mix probably won’t help your score. It can actually lower your score because it reflects the risk that you’re trying to take on debt you can’t repay.
Another factor is the number of recent credit inquiries on your report. Frequent hard credit inquiries, or hard pulls, can lower your credit score by as many as 10 points, so it’s a good idea to limit the number of new credit applications you make. If you do have to conduct a new credit check, try to get it done through a soft inquiry so that your score isn’t dinged.
Lastly, it’s worth checking your credit report regularly for errors. If you find inaccurate information on your report, you can notify the credit bureau directly and get it removed. However, a negative item on your credit report can stay for seven years, so it may be difficult to remove every error from your file.
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