Improve Your Credit Score

December 10, 2018

When was the last time you checked your credit score? Were you happy with what you saw? Do you need to take immediate action with the idea of boosting your score as soon as possible?

With 2018 coming to an end, it’s time to turn your attention to the new year. This means many things in regards to your finances, including a focus on your credit score.

According to Experian, credit scores fit into one of five categories:

  • Exceptional: 800 to 850
  • Very good: 740 to 799
  • Good: 670 to 739
  • Fair: 580 to 669
  • Very poor: 300 to 579

If you have an exceptional credit score, your goal is simple: to keep it in this range in the future.

Conversely, if your score fits into one of the other four categories, there’s room for improvement.

Here are four simple ways to improve your credit score in 2019.

1. Pay Your Bills On Time

Forget about what you’ve done in the past, and set the goal of paying all your bills on time in the future.

Late payments have a major impact on your credit score. Furthermore, if an account is sent to collections, you can expect even more damage.

Implement a system for tracking your bills and paying on time. This one simple step will improve your finances in many ways.

2. Eliminate Debt

There are times when it makes sense to move debt around. For example, if you have several credit card balances, a balance transfer credit card can save you money and improve your organization.

However, if you want to do something that improves your credit score, focus on eliminating (or reducing) your debt as opposed to moving it around.

3. Don’t Open New Accounts for No Reason

Yes, it’s true that a good mix of credit can have a positive impact on your score. Even so, don’t get into habit of opening new accounts just to accomplish this goal.

If you need a new credit account, such as a credit card or car loan, it’s okay to proceed as long as it fits into your financial plan. The mistake you don’t want to make is opening new accounts without a good reason to do so.

4. Keep Balances Low

Do you have credit cards? How about other types of revolving credit, such as a home equity line of credit?

A high debt load can drag down your score, so do your best to keep balances as low as possible.

The one thing you want to avoid is making the minimum payment on these accounts. When you do this, you can’t expect to make progress in a timely manner. Look for ways to free up money so you can pay more than the minimum. You won’t regret this decision.  

Final Thoughts

As 2019 wears on, implement the tips above to boost your credit score and improve your overall financial health. By doing these things, you’ll see your score on the rise – and there’s no better feeling than that!

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