Credit scores are very important in many financial dealings and you should make every effort to have stellar scores. The reality is that there are a number of things that can impact your credit scores. However, a low credit score isn’t a permanent status. You can improve those three-digit number so that lenders can respond to you more favorably when determining your dependability. Let’s look at five simple ways to elevate your credit score.

Bring Open Accounts Current

You may not think about it seriously, but your payment history can impact your credit score. To maintain healthy credit scores, it helps to keep all of your open accounts current. Make it a point not to miss payments or default on an account, since either occurrence raises a red flag on your credit report. The first negative activity on your report has the potential to hit your credit score hard. The sooner you bring your account back to current status and stay current, the sooner your score will start improving.

Lower Credit Card Debt

High outstanding credit card debt can affect your credit score since it is considered a bad debt. Credit card debt has high interest rates and isn’t used to purchase appreciating assets. Your credit utilization ratio, the percentage of your total available credit presently being utilized, also factors into your credit score. A lower credit utilization ratio means that you have more available credit, which is encouraging to lenders. A credit utilization ratio of less than 30% is good, and paying between up to 20% of your overall balance can help your credit score.   

Resolve Any Collection Accounts

Transferring your debt time and time again doesn’t eliminate the fact that you still have a debt. Unless you pay off your debt, the collection agency will continue to do its jobs of reporting the debt. Make good effort to contact the debt collector listed on your credit report for more details, and see if you can pay your debt in full, so as to not have it reported to the consumer credit reporting agencies, such as Equifax. This could prevent further damage to your credit score, or you could see your credit score improve.

Check Credit Report for Errors and Fraud

Regularly paying attention to your full credit report can shed light on the things that could be negatively affecting your score, such as errors and fraud. Credit Karma is a good site that provides free credit monitoring. Be sure to dispute your credit report and fix any inconsistencies, which is an easy way to elevate your credit score.

Keep Accounts Open After Balance is Paid Off

You might feel relieved to get an old balance paid off, but even if tempted, don’t close the account. This has the potential to damage your scores. Your credit utilization ratio is strengthened when your cards have zero balances, which is good for your credit score. It’s better to have an unused card that can help your score than to close an account.

Elevating your credit score requires initiate. It takes doing a few simple things to improve your score. Lower your credit card debt, bring open accounts current, resolve collection accounts, check your credit report for fraud and error and keep accounts open after paying off a balance.

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