Credit is one of those things most of us need to fully function as adults. We need credit to finance businesses, get transportation, buy homes, even rent apartments. Potential employers might pull your credit as part of a background check, too. If your credit score has taken a beating, it may interfere with all of that. But even if your score is pretty low, there are ways you can fix it. Here are some easy ways you can improve your credit score.
1. Understand Your Score
If you’re going to improve your credit score, first you need to understand it. Your score may range from 300 up to 850. Anything under 550 is considered poor. 700-749 is good, and above 750 is rated excellent. Even if you’re not a Discover card holder, you can get a free FICO score card for your credit.
2. Watch Your Credit Cards
Your use of revolving credit has a big impact on your credit score. Using a smaller percentage of your available credit is always better for you score. Optimal percentage is 30 percent or less. Paying down or eliminating your balances will improve your score. If you have multiple credit cards that carry a balance, consolidating them could boost your score.
3. Let Paid Debts Stay on Your Report
A lot of people are under the impression that old loans they’ve paid off should be removed from their credit report. But really, showing that you’ve done your job and paid off your debts as planned can actually help your overall credit score. A long history of good credit and timely payments is always a good thing.
4. Pay on Time
Everyone knows this, but it always bears repeating. One of the biggest factors in good credit is a long history of paying on time. The flip side of the coin is that paying late is going to hurt you.
5. Avoid Certain Behaviors
Sometimes improving your credit score could be as simple as avoiding certain things, like applying for excess credit, canceling zero-balance credit cards, or holding onto high balances. You also want to avoid using your credit cards at places like pawn shops or divorce attorneys, which usually sends a red flag to lenders the you could be high risk.