In tough economic times like these, it’s easy to fall behind on bills, charge things to your credit cards just to get by, even foreclose on your home just to get out of debt. But all of these things lead to a plummeting credit score, which turns into serious financial problems that stick with you for years to come. But there are ways to boost your credit score, and a recent article on U.S. News highlights six ways you can do so that may surprise you.
- Vet your credit report for errors. Often times many credit errors can be made as a result of someone simply sharing the same name as you – many of which are cases of identity theft. It’s your responsibility to monitor all three of your credit reports and check for clerical errors throughout the year. There are many free services to choose from these days, and most banks offer credit reporting for a fee that is easily accessible from your online accounts.
- Don’t take out too many cards. Every time you apply for a credit card, it’s noted on your credit reports. Applying for a bunch of cards in a short time will raise a few eyebrows and get you labeled as a “credit seeker” and a risk. Do not apply for credit you do not need.
- The less debt, the better. A common credit score myth is that carrying some credit card debt is better for your credit card score. As a rule of thumb, try to use less than 10 percent of your total credit limit. And if you can make more than one payment a month, that will also help boost your score since banks report at different times each month.
- Don’t wait to pay off your bill at once. Try making micropayments throughout the year. “Such small payments help your credit score because they lower your debt utilization ratio, which accounts for 30 percent of your credit score,” according to the article.
- More credit can be good credit. Don’t be afraid to increase your credit line – not to spend more money, but as a way toimprove your credit utilization ratio.
- Keep your cards active. Just having a card isn’t enough to improve your credit score: You have to use them – and use them responsibly – to have a positive impact on your credit score.
For an in depth look at these steps on improving your credit score, click here.