Friday, April 19, 2019 / by Harvey Rosenberg
Pay On Time
This one should be obvious, but late payments are a huge red flag to a company trying to give you money. These days, you should set up your payments to happen automatically, either through the credit card or loan company or through your bank. Payment history has a high impact on your credit score and takes 2 years or more to clear from your account.
Pay Down Balances
This is a little harder especially if you've racked up a lot of credit. However, moving your overall credit card usage down from 75% or more will impact your score. Move it to under 50% for an even greater gain in FICO points.
Keep Accounts Open
It may seem counter-intuitive to recommend keeping your accounts open. However, the number and variety of accounts on your credit report show history as well as an available credit. If you need to cut up the cards to avoid using them, do that. But don't close the account, especially if you've had it a long time. Total accounts have a low impact on your score, but your credit age has a medium impact. Lenders like to see that you're using credit responsibly.
Don't apply for New Accounts
Although the number of accounts you have shows the variety, lenders don't want to see a spray and pray method of trying to obtain a loan or revolving credit. If you're applying for a mortgage, avoid any hard inquiries on your account for up to a year.
Be Patient and Watchful
Improving your credit score can take time, especially if you have a large utilization that needs to be paid down. However, be patient and keep an eye on your score. Many credit cards and bank accounts have the ability to check your FICO score without hurting your credit. Check with your bank or credit card to see your current FICO score about once a month.