Credit scores can be a scary thing to think about, but a bad score is not the end of the world. Here are some simple steps you can take to improve your credit score, and if you need a hand understanding what your credit score is just check out our article all about that here.
Paying Your Bills
This is the most important piece of advice about improving your credit score. Do your best to always pay any outstanding debts on or before their due date. Being even a day late on a bill can lower your score, but regularly and consistently paying on time or in advance will actually improve your score!
Remember, a credit score is just a way of telling lenders how likely you are to pay back what you owe or borrow, so having a history of regular repayments will always make you look good.
Avoid a Default Listing
If you’re over thirty days late on a payment, and the lender has taken steps to recover the debt (contacting a collections agency) then you will have a “default” on your credit report. This is a note telling other lenders that you have a history of not paying back debts, and it can significantly lower your chances of getting a loan or mortgage in the future, and drastically raise your interest rates if you do.
So if a bill is overdue, pay it as soon as you can or contact the creditor directly. Remember, a responsible lender should always be willing to communicate with you about your situation, and being upfront about your situation will help your score in the long run.
Don’t Apply For Too Much Credit
Applying for lots of different lines of credit (credit cards, loans, etc) all at once will make you look desperate for money, which is a big red flag for lenders. It’s better to research your options thoroughly, and once you know the best option you have, go for that one. You’re much more likely to succeed, and you’ll have fewer different threads to keep track of.
Now even after all this, your credit score won’t magically jump to the top overnight. It can be a long hard road, but remember: the most important things lenders are looking at is risk and consistency, and both of those things are just fancy ways of saying “can this person be relied upon to pay me back?” These steps will tell them that you can.