How can I improve my credit score?

No matter what your credit history has been in the past, you can change your future score. A great deal can be accomplished within a year, and good credit scores may be restored within two years with careful diligence. This may seem like a long time. Yet, it always takes more time to restore your credit score than it takes to destroy it.

Here are the strategies you need to use to bring your credit score up

Pay bills on time

If you are forgetful, arrange for payments to come out of your account automatically. Do this for all your regular bills. Most lenders and credit card companies allow you to set up automatic payments for the minimum balance due.

Remember that your utilities may report late payments to the credit bureaus so don’t pay these bills late either. Just get into the habit of paying all your bills on time. If you know you are going to have a problem, be proactive. It may be possible to make arrangements. Then the lender may continue to report that your payments are “as agreed upon” instead of reporting you as delinquent.

Avoid maxing out your credit cards

If you need to make a big purchase that’s going to max out your credit card, reconsider. It may be better to go to your bank or credit union for a fixed term loan. Not only will this help your mix of credit, it will probably cost less, as loans usually offer lower interest rates than credit cards.

If your cards are already maxed out, stop using credit and focus on paying your cards down. This takes discipline, yet the rewards are well worth it. Not only does your score go up, you also feel good as you get a handle on your debt.

Limit the number of credit cards you have

Credit card companies woo you with all kinds of fantastic offers. Air miles. $50 off your purchase. Free merchandise. Before you fall for it, consider what it will do to your credit rating. Do you really need another credit card? The more credit cards you have, whether they carry balances or not, the greater your risk that it will lower your credit score. Keep two credit cards.

Stop changing credit card issuers

Every time you change to a new credit card company, you lose the benefit of a longer credit history with one company. It hurts your score.

Check your credit report

There’s always the possibility that someone else could be ruining your credit score for you. Look for evidence that your identity has been stolen. You can order your report for free once a year. Ask for a report from each credit bureau because each one gathers different information. If you do find something that’s inaccurate, report it immediately.