Need to boost your credit score? Unfortunately, a credit score isn’t like a race car, where you can rev the engine and almost instantly feel the result. Credit scores are more like your driving record: They take into account years of past behavior, not just your present actions.
In addition to making the right moves, you also have to be consistent. A few easy steps can push your score in the right direction. Here are seven simple ways to improve your credit score:
1. Watch those credit card balances
One of the major factors in your credit score is how much revolving credit you have versus how much you’re actually using. The smaller that percentage is, the better it is for your credit rating.
The optimum: 30 percent or lower.
2. Eliminate ‘nuisance balances’
Nuisance balances are the small balances you have on a number of credit cards.
The reason this strategy can help your score: One of the items your score considers is just how many of your cards have balances. So, charging $50 on one card and $30 on another, instead of using the same card (preferably one with a good interest rate), can hurt your score.
3. Leave (good) old debt on your report
Some people erroneously believe that old debt on their credit report is bad. The minute they get their home or car paid off, they’re on the phone trying to get it removed from their credit report.
Negative items are bad for your score, and most of them will disappear from your report after seven years. However, arguing to get old accounts off your credit report just because they’re paid is a bad idea.
Good debt — debt that you’ve handled well and paid as agreed — is good for your credit. The longer your history of good debt is, the better it is for your score.
Trying to get rid of old good debt is like making straight A’s in high school and trying to expunge the record 20 years later. You never want that stuff to come off your history.
4. Always pay bills on time
If you’re planning a big purchase (like a home or a car), you might be scrambling to assemble one big chunk of cash. While you’re juggling bills, you don’t want to start sending bills late. Even if you’re sitting on a pile of savings, a drop in your score could scuttle that dream deal.
One of the biggest ingredients in a good credit score is simply month after month of plain-vanilla, on-time payments. Credit scores are determined by what’s in your credit report. If you’re bad about paying your bills — or paying them on time — it damages your credit and hurts your score.
5. Don’t hint at risk
Sometimes one of the best ways to improve your credit score is to not do something that could sink it. Two of the biggies are missing payments and suddenly paying less (or charging more) than you normally do. Other changes that could scare your card issuer but not necessarily dent your credit score: taking out cash advances or even using your cards at businesses that could indicate current or future money stress, such as a pawnshop or a divorce attorney.