Credit score can be influenced by a number of factors. However, some factors can lower your score, such as late or missed payments, collections, and judgments. You can improve your credit score by taking simple steps that are both free and easy.
Paying on time
Paying on time is one of your most important assets in building credit. FICO estimates that about 35% of credit scores are based on payment history. It is vital to pay at minimum the minimum payment on all of your bills. If you can, try to make more each month.
History of payments
Your payment history is one factor that can influence your credit score. In fact, it accounts for 35% of your total score. Your payment history shows lenders how likely it is that you will make timely payments. It is the most important part your credit report. Therefore, it is essential to pay all bills on time. You can still improve your credit score by not making late payments, but it is best to make an effort to avoid them.
Credit utilization ratio
First, you must know how to calculate credit utilization. Your credit utilization ratio is the total amount of credit you have used divided by the total amount of available credit. This number will allow you to determine your debt management level. The best credit utilization ratio is less than 30%.
Diversifying your credit mix
Diversifying your credit mix is one of the easiest ways to boost your credit score. Although it is important that you have a balanced credit portfolio, it is equally important to not use too much of your credit. A healthy credit mix should include both installment loans and revolving accounts.
You can get a quick loan
Quick loans are designed to help you in times of emergency. It usually takes a few days before you can get the money you need. These are less risky than unsecured borrowing, which can take many weeks to be approved. You can also borrow money from a family member or friend. This method can be more expensive than a traditional loan, but it is quicker. You will be required to sign a loan contract. It is a good idea to have an emergency fund, so you can quickly borrow money when you need it.
Charging for collection or charge-offs
Negative credit scores can be affected by charge offs. They are generally kept on your credit report for seven year. There are steps you can take to improve your credit score and rebuild it. These steps will take time, but will allow you to make a positive impact on your credit report and score.