Do you want to improve your attractiveness to lenders by improving your credit score? There’s good reason to do so—a higher credit score can provide you a greater array of financial options and more favorable credit offers. And there’s always room for improving your creditworthiness by understanding your credit score, even if yours is good to begin with.
Keep in mind, however, that your credit score is based on your history of borrowing and repaying money, so there’s no way to instantly change it. But here are some effective strategies that can help to strengthen your creditworthiness over time.
Top ten strategies for improving your credit score
10. Learn what your current FICO credit score is and what appears on your credit report. You’re allowed one free credit report from each of the three credit reporting bureaus, accessible at AnnualCreditReport.com. When you pull your report, you can also pay a small fee to see your credit score. If you’ve used up your freebies for the year, Score Power can give you immediate access to your Equifax Credit Report, which includes your current FICO credit score.
9. Don’t open new credit cards that you don’t need just to increase your available credit. This approach could backfire and could lower your score.
8. Try to keep your total account balances as low as possible. High outstanding debt may negatively affect your score, as you have a greater chance of missing payments.
7. Check your report for inaccurate information and correct any mistakes. Incorrect information on your credit report is a warning sign for identity theft, which can be very damaging to your credit score. Check out more information for preventing and recovering from identity theft.
6. If your credit is severely damaged, or if you have a very short credit history, there are still ways to improve your creditworthiness over time. Consider opening new accounts responsibly and pay off debt on time.
5. If you fall behind on paying a bill because of illness, unemployment, or family issues, write a short explanation to the credit reporting agencies. They will add it to your credit report. It won’t improve your credit score directly, but creditors may take your personal statement into consideration when evaluating you. Also, call your creditor to explain the circumstances and, if possible, work out a payment schedule you can meet.
4. If you need help managing your credit, contact a reliable nonprofit credit counseling agency. Find an agency in your area through the National Foundation for Credit Counseling.
3. To minimize the number of inquiries on your credit report, don’t apply for multiple credit cards over a short period of time, and don’t apply for a card you’re not likely to get. Apply for new credit accounts only as needed.
2. Make all of your payments on time. If you are forced to miss a payment, be sure to pay it the following month along with the current payment. Past due accounts will be listed on your credit report. If you have missed payments, get current and stay current. As a general rule, the longer you pay your bills on time, the better your score.
And the number one strategy to improve your credit score…?
1. Continue to check your credit report regularly, charting your progress along the way. Everyone’s financial situation is different and all credit reports are different as well. Monitor your credit report for how certain activities affect your credit score. Keep an eye out for false information and identity theft. And watch and see how positive activities like on-time payments and a good mix of credit accounts will raise your credit score over time.
The information contained in this blog post is designed to generally educate and inform visitors to the Equifax Finance Blog. The blog posts do not give, and should not be assumed to provide, personalized tax, investment, real estate, legal, retirement, credit, personal financial, or other professional advice. Before making any financial decision, you should always consult with the appropriate professionals who can explain your options, rights, and legal responsibilities, and advise you on any tax, legal, credit, or business implications that may result from those decisions. The views and opinions expressed by the authors of blog posts are their own views and may not be the views or opinions of Equifax, Inc. and/or its affiliates.