What do you see when you look at your FICO score? A score that is just about as good as it can get? One that can stand some improving?
FICO scores range from 300 to 850, with the majority of scores falling between 600 and 750. If this sounds familiar, you may be looking into the things you can do to boost your score.
While nothing comes fast or easy in regards to your credit score, there are small changes you can make that will have a big difference. Consider the following:
1. Start Paying Your Bills on Time
Forget about what’s happened in the past, and create a budget and system that allows you to pay all your bills on time in the future.
When you get into the habit of doing this, you never again have to worry about a past due account showing up on your credit report. This is a quick way to damage your score, so you want to avoid it at all costs.
2. Pay Off Debt
Even if it’s a slow and steady process, set up your budget so that you can pay off debt. From credit cards to personal loans – and that’s just the start – you should do your best to slowly bring down your balances.
When you do this, with a credit card, for instance, it improves your credit to debt ratio. As a result, you could see a bump in your credit score.
3. Don’t Open too Many Accounts
It sounds like a great idea to open another store credit card, for example, but doing so can actually work against you. Not only does this fail to increase your score, but it also increases the likelihood of overextending yourself to the point of not being able to make payments.
4. But Don’t Close Unused Credit Card Accounts
It’s okay if you don’t use a credit card anymore. Pay off the balance, put the credit card in a safe place and let it sit there.
Closing an account may increase your credit utilization ratio, which can ding your score.
Tip: you don’t want to keep a credit card account open if it has an annual fee.
5. Check Your Report for Inaccuracies
When was the last time you reviewed your credit report? Like many, you may not remember the last time.
All three credit reporting bureaus – TransUnion, Equifax, and Experian – can provide you with a credit report. Upon receipt, carefully review the report for any errors, such as an account that you don’t own.
If you come across any type of inaccuracy, dispute it immediately and work with the reporting agency to clear it up.
If you’re able to do all five of these things, you’re in good position to boost your FICO score.
As a result, you’ll feel better about your finances, while also positioning yourself to more easily secure credit cards and loans in the future.