How to Improve Your Credit Score?
You can improve your credit scores by applying the following strategies:
1. On-time Payment: You should always try to repay your credit card bills and other credits on time to have a good creditworthiness that ultimately increases your credit score.
2. Reduce Credit Card Balances: You should aim to keep your credit card balances low about your credit limits. High credit card balances can negatively affect your credit utilization ratio.
3. Accuracy of Credit Report: You should be aware of your right to obtain one free copy of your credit report every year and shall keep track of your credit report through apps and soft copies to ascertain the accuracy of the information presented by credit agencies in your credit report.
4. Avoiding too Many New Accounts: You should avoid applying for credit too frequently and to too many creditors. This shows your desperate behavior and may reflect the risk of lending. Limiting new credit applications helps you to improve your credit score.
5. Diversifying Credit Mix: You should always aim to use various credit types such as credit cards and installment loans as it reflects your financial and debt management ability. This creates a positive perception in the mind of the lender.
6. Maintain Older Credit Accounts: The duration of your credit account also affects your credit score. Try keeping an older credit account as it has a positive impact on credit history.