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6 Best Ways to Increase Credit Score Over Time

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Having a credit score in good shape can lead you to a great number of opportunities. It provides you with, for example, the chance to take a mortgage out if you are planning to purchase a home in the future. The higher the rating is, the higher the chances you become qualified for further assets.

In terms of maintaining a great credit score, it really comes down to the basics. Paying all your bills on time is fundamental, while other resources will advance it at a commensurate rate. Once you have made this a norm in your life, you will make future loan lending processes stress-free. Even if your credit rating is low, it’s not the end of the world yet, since there are plenty of financial resources and loans for bad credit.

Although it can be straightforward to keep the credit score in a good condition, it is far easier to let it fall into dire straits. Many of us do not have an amicable credit rating, for a myriad of reasons. Thankfully, there are multiple ways to increase credit score to a favorable degree. Here are the six best ways to increase credit score over time:

1. Keep a low credit card balance

Credit cards are to be used for huge expenditures. Unfortunately, they are too commonly used for everyday purchases that should be paid for with cash instead. This only helps to increase the balance on your credit card account, which could impact your overall credit score in a negative light.

There are many reasons to keep your credit card balance at a low level. Not only is this one of the most consistent ways to increase credit score, it helps to keep interest rates low. Paying extra fees doesn’t benefit your financial situation in the least bit, so it is key to only use your credit card when absolutely necessary.

2. Paying your bills

When you approach a lender for a loan, one of the first ways they will vet you is by taking a look at how your bills are paid. A good indicator of past pay performance is showcased in how well you pay your bills on time. If all the payments are made, this is one of the best ways to increase credit score over time.

This entails paying every single one of your bills on time as well. If you fail to have these bills paid in a timely manner, it will inevitably impact your credit score for the worse. Make sure to use all available resources at your disposal, if you are unable to meet your monthly bills. It will support your case, in the event that you have to defend your situation to a lender in the future.

3. Keep credit cards open

Contrary to popular belief, closing a credit card account can potentially do more harm than it does good. As long as the credit card is not costing you more, in terms of relevant fees, you should opt to keep them open. This is one of the lesser-known ways to increase your credit score.

Closing a credit card account leads to an increase on your credit utilization ratio. This becomes detrimental overall to your credit card limit, and invariably hampers your credit rating. Keep this account open and use it sporadically, to prevent it from being permanently closed up.

4. Become an authorized user

If you need a way to increase your credit score without ever actually using a credit card, become an authorized user. Ask someone, preferably a close relative, who has a high credit limit, to make you an authorized user to their credit card account. You don’t need to use the relevant card or account for any purpose; simply being recognized will help you build credit.

This approach greatly assists those who have minimum experience in using credit. Some consider this to be a short-term effect, but the long-term benefits are quite valuable. This is especially true if you plan to boost your credit file in the future, when you become more acquainted with the various processes.

5. Old debt presence

Whenever a huge debt is finally paid off, you may feel the urge to wipe any trace of its existence from your credit report. However, it may be wise to just leave them in place. If these debts were paid off on time and in full, the records can be one of the surprising ways to imcrease your credit score.

When a lender takes a look at your credit history, they can directly pinpoint all varying magnitudes of debts on the report. If a solid track record is present, in terms of paid off debts, your credit score will be positively impacted.

6. Monitor credit score accordingly

If you’ve taken every available tool into consideration so far, the last step entails being patient. Building a solid credit history means that you have to take all precautions in ensuring your overall score isn’t hampered. Implement long-term, good credit-building habits into your lifestyle, and this will come to you much easier.

Take a look at your credit score on a monthly basis, and act on any variabilities that may have occurred. This will help you manage your credit, and make it appear to be positive in the eyes of a lender.

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