Improving Credit Scores

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Credit score is a three-digit number that lenders use in order to decide the possibility of them getting repaid on time if they grant a credit card or loan. The higher the score, the more likely it is that one qualifies for loans and credit cards at the most favorable terms.

If the credit history is not good then there are several ways to improve them as well. Improving one’s credit scores takes time and patience. And the sooner one attacks the issues that brings down the credit scores, the faster it will go up.

If you have negative information on your credit report, such as late payments, a public record item (e.g., bankruptcy) or too many inquiries, you should pay your bills and wait.

Steps To Improve Credit Score

7 steps that can be taken to improve credit scores are as follows

Paying Bills On Time

When lenders review a credit report to decide on a credit score, they are interested to know if one is reliable in paying their bills on time. The reason behind this is that if one pays bills on time, in the past that reflects on how they will pay back in the future. There a positive influence can be made on the credit scoring factor by paying all the bills on time as agreed every month. If possible, pay the bills every two weeks rather than paying them once a month. This lowers the utilization of credit and hence improves the score.

Reduce The Amount Of Debt.

Pay off the credit card and debit card debts, also any other revolving credit. The credit utilization ratio is a very vital number in checking credit scores and for its calculation. The calculation is done by adding all of the credit card balances at any given point in time and dividing that particular amount by the total credit limit. Keeping low balances on credit cards and other revolving credit in other words high debt will have a negative effect on credit score.

Don’t Close Unused Credit Cards

Keeping unused credit cards open while they are not costing any money in annual fees—is a smart strategy, because closing an account may increase the credit utilization ratio. Pay down the cards that have maxed out before the others if there are more than one credit cards this brings down the credit utilization ratio. Avoid opening accounts just to have a better credit mix

Avoid Applying For Too Much New Credit.

Unnecessary credit can lead to harming one’s credit score by increasing the number of enquiries. Opening a new credit card though increasing the overall credit limit, will create scope for a hard inquiry on the credit report. And multiple number of inquiries can have a negative impact on the credit score. Manage the credit cards will responsibility.

Keep A Track Of Inaccuracies

Dispute any inadequacy found the credit report. False information are many times the reason for dragging down credit scores. Verification of all the listings must be made to ensure accuracy. Any errors made must be reported for immediate rectification.

 Pay Off Debt Instead Of Moving It Around.

An ideal way of improving credit score in by paying down the revolving (credit card) debt. Owing equal amounts but having a lesser amount of open accounts might lead to lower credit scores.  A payment plan must be made that focuses most of the payments on the high interest cards whilst maintaining minimum payments on the other accounts. While paying off debt, be sure to get it in writing. In addition to that, if there are any debts that seems unrecognizable, always dispute them with the bureaus, they might get removes improving the credit score.

 Do Not Haste

The credit scores will not rise overnight, it takes time. So, one of the most important things to keep in mind in to be patient and wait in order to develop a long-term good credit score. Habits such as paying off bills, scrutinizing the data take time to develop. Regularly monitor the score’s ups and downs. This will help better understand the working of the system and better manage the credit scores.


Other than the tips mentioned above a few extra things can be kept in mind while improving credit scores. Re-establish the credit history if there have been in prior problems, opening new accounts and making timely payments help raise the score. Apply for new credit cards only when needed, do not open new accounts just to have a better mix. Keep a note of the fact, that closing an account does not make it disappear, it will still be visible on the credit report and may also be calculated in the credit score. Try to minimize the application of credit cards, this will also help reduce hard inquiries.