How To Increase Your Credit Score. Is It Really Possible?

Jaclyn A. writes...

"Jeff. 1- is it really possible to increase my credit score? I kinda don't believe all the hype. 2- if it is possible , do I do it myself or pay someone to do it for me?"

Replies (7)
  • Pay on time!

    This is an obvious tip, but one that's still worth mentioning. Make sure you pay all of your accounts on time. Even one slip up may affect your score.

    • If you have trouble remembering to pay on time, consider setting up some kind of reminder. You can even set your accounts to automatic bill payment through your banking service.
    • Your debt to credit-limit ratio.

      It's obvious you need to reduce any debt. In doing so, you'll keep your debt to credit-limit ratio. Get this as low as you can.

      For instance, if you've got $5,000 of debt with a $6,500 credit limit, your ratio is 77% ($5000 divided by $6500). This means you've used up 77% of your available credit. This will hurt your credit score.

      It signals you are living above your means.

      • Keep some unused accounts open.

        Closing unused accounts is a common myth when it comes to improving your credit score. In fact, closing accounts can actually hurt your score. Why? Because a part of your score is calculated by determining how much debt you have versus how much available credit you have.

        • If you close out your available credit, your debt becomes a larger percentage of the credit available to you and may lower your score.
        • Spread out your debts.

          You can improve your score by spreading your debt among credit cards even if your debt remains exactly the same. This is because a credit card that's almost maxed out is more likely to be detrimental to your score. Consider transferring that balance to one or more other credit card accounts.

          • Avoid applying for too many cards.

            Your score can be affected if you fill out too many credit applications over a short period of time. While you can acquire multiple cards over time, it's just not a good idea to sign up for too many of them at once. This makes you look desperate for any kind of credit.

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