1. Watch your credit card balances. It’s easy to spend money on credit cards, but pay attention to how much credit you’re actually using compared to how much you have. If you pay attention to how small that percentage is, the better your credit rating could be. The smaller, the better. Keep your balance as low as you can.
2. Get rid of small balances on multiple credit cards. Charging one thing to one card and another to a different card can be harsh on your credit score. It’s better to pay off small balances on multiple cards and then figure out one or two cards that you can use for everything.
3. There is such a thing as good debt, and you should leave it on your credit report. Good debt is debt that you’ve handled well and paid off as you agreed to. If you have a good history of good debt, then your score is likely to be higher. You want to keep as much old, good debt as you can.
4. Shop for interest rates all at one time. When you apply for credit, there is the possibility that there could be a small dip in your score and that could last up to a year. The more you apply for credit, the more you want to use credit.
5. Pay all of your bills on time. This not only creates more ease, but it will help you figure out what kind of money you can save later on. You could have all the money in the world, but if you start to pay your bills late, that could impact a big purchase you have your eye on down the road – like your dream home.
6. Know that it takes time to improve credit scores. There’s no quick fix for a bad score, so pay your bills and wait it out.
7. Order your free credit report annually. Each consumer is entitled to one free credit report each year from each of the three credit bureaus: Experian, TransUnion and Equifax. Be sure to take advantage of this free service to monitor your credit, correct inaccuracies and discover identity theft. Go to AnnualCreditReport.com to order your free report.