Tips to improve your credit score

A task that seems very arduous and impossible is how to improve your credit score. Many clients ask me;  “What can I do to achieve it? 

I’ll give you 3 ideas so you can see an impact on your credit report.  It’s possible!  

 1) Pay your bills on time. 

 This is the simplest and the one way that many people end up failing.  Making your payments before or on your due date can often make a big difference in your credit card debt. But it also determines if the lenders can trust you. Any negative information on your credit score could stay for many years, but most lenders pay special attention to the last 2 years’ history depending on the kind of credit you’re requesting. Mortgage companies will examine all accounts with a magnifying glass within 2 to 3 years, but auto loans can take into account repossessions on auto loans during the last 2. These accounts will affect the interest rate they will offer you plus the final decision for approval. So, never let negative information in your credit card accounts takes away a good deal!

2) Do not close credit card accounts. 

 Try not to max out your credit card balance, nor acquire too many of them. This will end up damaging your credit instead of boosting your score.  But if you have them; don’t close these accounts. Keep them at a low balance of 30% or less of what your credit limit is and this will help you maintain a good number in your points and FICO scores.

3) Pay all accounts

 If you have an account that you are paying by the due date, but next to it you have others in collections, the account that you pay on time will not help you improve your credit.  You need to pay all credit card balances, lines of credit on time and maintain low balances in order to obtain an excellent result.

If you can’t make a full payment, contact your lender and ask for a payment plan. As the economy recovers, many lending companies are more lenient and prefer to come into an agreement with their customers instead of losing all the capital invested.

Don’t be shy and contact your credit lender, it’s better to keep a good relationship than a negative remark in your report.

4) Prepaid Credit Cards

Another simple and effective method to build your credit is requesting a prepaid credit card from your bank.

Usually, these cards are back up with your savings account and once you show a good payment history after a few months, the bank can offer you a credit card directly from them with a higher credit line. Just keep the balance under 30% and make the payments on time.

It is not complicated to understand credit, but for many it is.  Credit experts are here to serve you. It never ends with the report, it’s a daily effort and it has to be monitored all the time.  It is important that once a year you check if there are mistakes, if everything is in order and if you have had a good year.  

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