Today, we bring to you a guest post.  Our guest post goes over the 10 Steps to Raise Your Credit Score and Keep it There.  Let’s dive in!

10 Steps to Raise Your Credit Score and Keep it There

There are few things in life that can play such an important role in our lives while also being so opaque and difficult to understand like a credit score. Your credit score accrues over a number of years and may be checked by anyone from creditors to potential landlords to potential employers. With so much on the line when your credit score is checked, it’s important to make sure that your score is as high as possible, but many people don’t understand how their score is calculated and how they can raise it. If you haven’t checked your credit sore recently there may be a surprise waiting for you. Here’s what you need to know to understand how your credit score works, and how to make it go up.

1) Check Your Credit Score

You can’t start improving your credit score if you don’t know what it is and what is causing any dips. Not only is everyone entitled to a free formal credit report every year, if you’re wondering “how do I check my credit score,” there are many excellent services that can give you regular updates in between your annual reports, in order to better track your behavior and see how it is raising or lowering your score from month to month.

2) Dispute Any Mistakes Immediately

One of the most important benefits of getting a credit report is the ability to note any information on your report that is accurate. If you have accounts assigned to you that you didn’t open, they may be significantly harming your score. Likewise, erroneous reporting of missed payments that didn’t happen needs to be addressed with the creditors promptly and can lead to a quick and substantial boost to your score once resolved.

3) Always Pay Your Minimums

When it comes to key elements in your credit score, paying your bills on time is the most important factor there is, as it contributes both to your payment history and your derogatory marks, which are both key metrics. While it’s good to try to pay down your debts, only do so after ensuring you’ve made all your minimums on all of your accounts first to avoid these negative impacts.

4) Add Credit to Your Limit

Another crucial metric for your credit score is your credit card utilization or the percentage of available credit on your cards that you are using up. While reducing your total credit card debt over time is an important element of keeping your credit utilization down, an easy way to improve your rating if you are struggling is to add a new credit card account, then keep its balance at zero. By doing so you immediately raise your available credit while not changing your credit usage, resulting in a lower utilization number.

5) Keep Old Cards Open

When you have a trouble credit card and finally get it paid off, it can be easy to think it’s time to close it and put that chapter behind you. As discussed above, however, low credit utilization is important, and when you cancel a card you take all of that unused credit and remove it from your calculation, causing your utilization to rise and your score to fall. Keep the old card open and at zero to maximize your score.

6) Reduce Your Spending

Many of the best ways to improve your credit score involve allocating more of your money to paying off your debts and making your bills. The most effective way to improve the speed you can accomplish this is to make spending changes. If you’re in need of stark credit improvement, you may need to make reductions to your discretionary spending until you are able to get your credit under control.

7) Reduce Your Credit Debt

It’s important to remember that the above rules about making all your payments still takes precedent, but once you’ve done so, the best use of any money you have left to allocate to your bills is to pay off credit cards, starting with your highest interest card. Not only will this reduce the amount of interest that accrues, it also reduces your credit usage which once again ties back to your efforts to reduce your overall utilization to raise your score.

8) Diversify Your Debt

One way to create a positive impression with potential lenders is to create a balanced borrowing profile. While you should not be taking on new loans for purchases you didn’t need, if you have a record of consistently making payments in a variety of forms from credit cards to car loans to a mortgage, it shows reliability as a borrower who always meets all their different payment responsibilities.

9) Spread Out Your Applications

An easy mistake to make when learning that both more accounts and lower credit utilization are good for your credit score is to go on a rush of applications for new credit lines. Although this can help with those metrics, it can also harm your score due to having too many hard inquiries. A hard inquiry occurs when a creditor formally checks your score and is different than the soft inquiries used by trackers or sometimes by lenders doing a brief check to discuss your options. If you are raising your score in preparation for a big application, having too many new accounts may do more harm than good.

10) Remain Patient

When you discover that your score is not as high as you want or need it to be, it can be easy to look for a quick fix. Unfortunately, only in very rare occasions are there easy and immediate solutions for big jumps. Building your credit score takes time, but if you set new, better habits and stick to them, you’ll see your scores begin to steadily climb and find that it’s easier to keep them high once they do because you’re acclimated to living responsibly with your credit.

Credit score improvement is an ongoing process, not a one-off activity, but it’s worth putting in the work. If you haven’t checked your score recently, there’s no time like the present to get your free credit report, find a tracking service you trust, and get to work improving your score.