5 Ways to Improve Your Credit Scores

Are you ready to boost your credit scores? Chances are it won't happen overnight but here are some simple tips to help you get those scores back up to where you want them.

1. Be Mindful of Credit Card Balances

To boost your credit score be sure to keep balances low and pay them down as often as you can. If you have multiple credit card balances it could benefit you to consolidate them with a personal loan. Another strategy is to see if the credit card issuer will accept multiple payments throughout the month in order to pay down the balance sooner, thus improving your score.

2. Eliminate Balances on Credit Cards

A good way to boost your credit score is to eliminate balances on multiple credit cards. One of the items your score considers is how many of your cards have balances. That’s why charging $50 on one card and $30 on another instead of using the same card for both charges (preferably one with a good interest rate) can hurt your credit score. The solution is to gather all those credit cards with small balances and pay them off. Then select one or two go-to cards that you can use for everything.

3. Use Your Calendar

If you’re shopping for a home, or any other big ticket item, it pays to do your rate shopping within a short time period. Every time you apply for credit, it can cause a small dip in your credit score that lasts a year. The FICO score, a credit score commonly used by lenders, ignores any such inquiries made in the 30 days prior to scoring. If it finds some that are older than 30 days, it will count those made within a typical shopping period as just one inquiry. If lenders are using the newest forms of scoring software, then you have 45 days. With older forms, you need to keep it to 14 days.

4. Pay Bills On Time

If you’re planning a major purchase like a home or a car, you might be scrambling to assemble one big chunk of cash. The last thing you want to do is start paying bills late. Even if you’re sitting on a large savings, a drop in your score could derail your dream of home or car ownership. One of the best ways to keep your credit score up is simply month after month of plain, old, on-time payments. Putting cash into a savings account for a major purchase is smart. Just don’t slight the regular bills to do it.

5. Don't Obsess

Are you getting ready to make a big purchase, such as a home or car? At least a few months in advance, have a look at your credit score. You can regularly check your credit report. Everyone is entitled to one of each of your three credit bureau reports (Equifax, Experian and TransUnion) for free every 12 months through AnnualCreditReport.com. It’s smart to stagger them. Send for one every four months, and you can monitor your credit for free.

You should be focused on your credit score when you know you’ll soon need credit. In the interim, pay your bills and use credit responsibly. Your score will reflect these smart spending behaviors.