How Do I Increase My Credit Score?

Recently I stumbled upon a list of tips on how to increase credit score in order to improve the chances of being approved for different finance products, including personal loans, mortgages, etc.

What do you ppl think?

1) Don’t close all your accounts!

Even if you have the means to pay off your debt, any lending institution is looking for your capacity to make timely payments. To show this, you will need to have payments to make! While it’s wonderful if you can pay a balance in full every time a bill comes in (and don’t we all wish we could do that?) it’s also important to keep at least 1 or 2 revolving accounts open and active.

2) Don’t be LATE! (ok I know this one is probably obvious)

While this could be an ability condition for some (can’t afford it!) others are just not structured enough in their life to stay organized! I have seen wealthy people who JUST don’t keep a good grasp on when their payments are due, or leave their bills to be paid by someone else.

Find a way to organize your debts and your due dates, so you don’t miss any payments!

3) Don’t max out your revolving credit!

For those of us, like me, that can’t pay those bills in full every month – my best advice is to keep your balance at or under 50% of your limit. I have seen this create a 20 point or MORE difference in a credit score! This is BIG. If you DO need to exceed this amount, pay it back down as soon as possible.

4) Don’t EVER exceed your credit limit!

This is also a HUGE factor that can pull your credit score down as much as being past due! Always know what your credit limits are! I keep a spreadsheet that I send every time I make a payment or get in a bill. It’s good to stay organized!

5) Keep an installment loan or two…

Important in credit scoring is a balance between revolving and installment loans. A mortgage, car loan, or personal loan from websites like – 1 or 2 is going to be good. Too many – as in most everything – is not advisable.

6). Those pesky collection accounts!

It seems to happen to even the best of us – that small amount that we thought our medical insurance was going to pay! While medical collection accounts are pretty common – even if you think it is an error – pay it before it becomes a collection – and if it does, pay it right away! You can always dispute it afterward when it is no longer affecting your credit profile.

7) Where to begin to get credit?

If you are just starting out, or just have not used credit before and want to get started establishing a credit profile, I recommend applying for a secured credit card. These can be as simple as investing $200 for a $300 credit limit card. Once you have made a year or so of timely payments, you will not only get your $200 investment back – but you will be on your way to getting a credit score! Just make sure to ALWAYS make those payments on time – and don’t exceed 50% of the limit – and you’ll be on your way before you know it!

Keep these things in mind – and your credit score will be there when you need it!