Improving your Credit Report and FICO score does not happen over night. However, it is something that can happen gradually with a little time an effort. Credit history is a huge factor in almost all major financial decisions. In most cases, maintaining a good credit history is vital for your financial future. Here are some ways you can improve your credit and FICO score now and maintain good credit:
- Check your credit report – check your credit report for errors and fix any inaccuracies that could be adversely affecting your history and FICO score
- Reduce the amount of debt you owe – you will have to minimize your use of credit cards and pay down the balances, but if you create a budget and follow it, this is feasible (Note: paying the balances with the highest interest rates first will reduce the amount of interest you have to pay in the long run)
- Pay your bills on time – late payments can have drastic effects on your credit
- Reach out to a credit counselor (be careful that they are legitimate) – if you are falling behind, get help before it gets out of your control
- Contact creditors when you are falling behind – they may be willing to make negotiations with you before it ends up on your credit report
- Keep balances on “revolving credit” accounts low – high balances affect your score negatively
- Pay off debt – don’t move it around to different credit accounts because it will still show up as outstanding debt on your credit report
- Keep your unused accounts open – the credit limits count towards your credit availability and affect your score positively
- Don’t open a bunch of new accounts – while this shows higher available credit, it also raises the number of credit accounts you have open, and it could lower your score
- Shop around in a specific amount of time – if you are looking to open a new credit account, do your shopping within a given amount of time because your FICO score calculates new lines of credit partly by the number of inquiries
- Repair negative items – if you have some bad credit, treat all new accounts responsibly and your score will improve over time
- Have credit cards, but use them responsibly – having installments and monthly payments helps to rebuild your credit score, but don’t run the balances high
- Be careful closing accounts – closed accounts still show up on credit reports and the credit limit can no longer be used to reflect in your credit availability, so this could be detrimental to your FICO score
