Your credit score is one of the most important numbers in your financial life. It’ll affect your ability to get everything from an apartment rental to a home loan. If you’re struggling to keep yours afloat, don’t worry — we’re uncovering five proven methods that can improve your credit score in as little as one month!
Pay Bills on Time
It seems obvious: pay your bills on time to achieve a good credit score. But many don’t realize how much impact this has—late payments can hang over your head for years, so it’s important to keep up with your bills. Set up automatic payments or reminders on your phone so that you never forget to make a payment. Even if you an only make the minimum payment, it’s still beneficial at keeping your credit score stable.
Lower Your Credit Utilization Ratio
Your credit utilization ratio is the credit you’re using relative to your overall available credit. You want this ratio to ideally be below 30%. Using more than that can hurt your score. If you’re concerned about your credit utilization, pay down existing balances on your cards. If you’re able to, focus on paying off high-interest credit cards first and avoid building these debts up again to save money on interest.
Keep Old Accounts Open
The length of your credit history also plays a role in determining your score. Older accounts can positively impact your credit score, so it’s generally a good idea to keep them open—even if you’re not actively using them. If you have other credit cards that you only use occasionally, consider making a small charge every few months, then paying it off right away. This keeps the account open and adds to your overall credit history without adding to your debt.
Diversify Your Credit
Having a mix of different types of credit—such as credit cards, installment loans, and retail accounts—can benefit your credit score. Lenders like to see that you can manage various types of credit responsibly. Just make sure that you can afford the extra payments without straining your budget too much. Keep in mind that while diversifying your credit can help your score, it should be done intentionally and not simply for the purpose of improving it.
Try Asking To Be an Authorized User
If there is someone in your immediate family or friend circle who has positive credit and good credit habits, don’t be afraid to ask them to add you as an authorized user on their cards. If your credit is terrible, and if someone else has high credit, you can be added to their credit card as an authorized user. If you take this route, it;s essential to have a conversation about expectations.
Be sure the primary cardholder knows that you’re only going to use the card responsibly, and explain how the arrangement will play out. This can be a quick and productive method for boosting your score, but it requires a hefty amount of trust and communication.
