Your credit score is one of the most important numbers in your life. Therefore, it is in your best interest to get your score as close to 800 as possible. What are some ways to improve your score and show lenders that you are responsible?
Apply For a Loan
Your credit mix is partially responsible for determining your credit score. Therefore, adding an auto loan or taking out a credit card can provide a better balance to your current debt profile. Even a 12 month loan or a $500 credit card balance can improve your score by hundreds of points.
Pay Down Existing Debt
Ideally, you won’t use more than one-third of your available credit. If you are using more than that amount, you should work on paying down your debt as quickly as possible. Paying down even a few extra dollars a month can help to reduce your balances in a relatively short period of time.
Get Current On Past Due Debts
If you have a payment that is 30 or more days late, you should pay it off as soon as possible. If you have multiple late payments, take care of the most current one that you failed to pay.
Make Sure That Your Credit Report Is Accurate
Your credit report is based on whatever creditors tell the credit agencies. In some cases, that information may not be correct. By checking your report and challenging any false statements on it, you could increase your score significantly.
File For Bankruptcy
Bankruptcy can be beneficial for those with many past due or missed payments on their credit report. It can also be best for those who have large debts and few assets. While it may hurt your score initially, you can rebuild your credit in a year or less after your case is settled.
Consolidate Your Debt
Consolidating your debt allows you to reduce your interest rate and put more toward your balances each month. By paying down your debt faster, you decrease your debt-to-income ratio as well as your credit utilization rate. These can both have significant impacts on your credit score.
Your credit score is not a static number. Instead, it can go up or down based on how well you handle money and debt. Therefore, if your score isn’t where you want it today, there are many things that you can do to improve it and keep it where you want it for the rest of your life.