Having an excellent credit score is incredibly important. For one thing, a high credit score will help you secure a loan for a house, a business, a lease on a car and much more. Basically, your credit score is like your key to a much more financially free lifestyle. Moreover, having a good credit score and rating will help your cash flow situation. For instance, if you have good credit, you will also have a higher credit maximum, which will help you pay for items you need without getting too far into the red. When it comes to taking measures to improve your credit, you want to be sure that you stay diligent and follow a number of steps that will help you raise your score. Here are five helpful and effective credit score improvement tips.
- Always pay your bills on time and make sure bills never enter the collections phase – if a bill does enter the collections phase, you want to pay it off immediately. The truth of the matter is that the longer a bill sits in collections, the more damage it will do to your credit.
- Never spend more than twenty percent of your credit limit – the more money you spend, the slower your credit score will build. When you get too close to your credit limit, you are getting closer and closer to maxing out your card, which is dangerous. Hovering below the 20 perfect range will help you stay in line and out of debt.
- Make sure to pay your credit card bill in time, and in full – you never you wait, because this causes interest to grow and it can be harder to pay your bill. As soon as you default on your credit bill, you are causing potential damage to your credit score. This is why you want to pay it off – in full – as soon as your bill comes in.
- Be sure not to apply for too many credit cards within a short period of time – if you do apply for a card and you are accepted, you want to wait at least 12 months. If you visit Credit Sesame, you may notice that your credit dips every time you take out a new credit card. This is why you want to wait for your credit to build and then fill out an application for a credit card. This process usually takes about 12 months, but it could take longer if your credit score is particularly low.
- Once you have established good credit – you want to apply for a new credit every six months so that you can have a number of credit lines working for you. One of the best ways to build your credit is to have multiple lines of credit. Of course, you want to wait between applying, but switching off between different cards will certainly help your credit score become more robust. In the end, though, the key is to balance these cards with more responsibility, because you don’t want to default.