There are several ways to improve your credit score. Begin by aiming towards the scoring models when computing your credit score.
Payment history: Have you paid your bills on time?
The answer to this question plays a significant factor in your credit score. Paying your bills after the due date, credit accounts being referred to collections due to nonpayment, or declaring bankruptcy affect your credit score negatively. The best way to maintain a good credit score is to always pay your bills on time.
Credit Limits: Are you close to reaching the credit limits on your credit cards?
If you answered yes, it is possible this will have a negative effect on your credit score. Having credit cards is not bad, but to ensure that you are doing the most for your credit score, keep a low balance. Keep your total balance of all credit cards less than 30 percent of your available limits to positively impact your credit score.
Credit Inquiries: Have you applied for new credit recently?
Scoring systems will consider the amount of credit inquiries on a person’s credit report. Applying for too many new accounts in a short time could have a negative effect on your credit score. Keep your credit inquires to a minimum when attempting to raise your credit score. A credit inquiry will remain on your credit history for two years, so fewer than two inquires is most desirable within this two-year period.
Credit Accounts: How many credit accounts do you have? What kinds of accounts?
Take into consideration when attempting to get financing that some scoring models consider loans from finance companies poorly and may have a negative effect on your credit score. Having established credit accounts is a positive factor, however having too many card accounts may also affect your credit score negatively. Be vigilant and keep the number of open card accounts to a minimum to ensure maintaining a good credit score.
Credit scoring systems are complex. If you need assistance or have questions on ways to improve your credit score, please call our office at (269)783-4157. Chi Ishobak is here to assist you with your financial needs. We’re only a phone call away.