There are plenty of things you can – and should – consider doing to improve your credit score. We’ve got seven of them here.
- Review Your Credit Report – You’re allowed one free credit report each year from the three consumer reporting agencies (find them at annualcreditreport.com). If you find inaccurate information on one of your reports, it may be wrong with all three reporting agencies. In order to improve your credit score, notify all reporting agencies to have them correct any inaccurate amounts, invalid accounts, or mistaken late payments that adversely affect you.
- Use Payment Reminders – Timely payments are one of the best ways you can improve your credit. Set up reminders or use automatic payments to make sure you don’t have late payments.
- Make Extra Payments – If you can afford to, pay down your bills twice a month rather than once a month. This improves your credit score by lowering your credit utilization (the percentage of your available credit used during a billing cycle). Keeping your balance low on credit cards and making regular payments are key in boosting your credit score.
- Limit Applications for New Credit – If you apply for multiple new accounts in a short amount of time, it will likely decrease your credit score.
- Contact Creditors for Help – If you can’t afford a monthly bill, quickly contact your creditor to see if setting up a payment plan is an option. This could reduce the negative effects of late payments on your credit, helping to protect your credit score.
- First Pay Down Maxed Out Cards – If one of your credit cards is at or near the credit limit, one recommendation is to pay down that credit card balance first before paying down other balances. The goal is to never borrow more than 30% of your available credit on a card to build a positive history.
- Avoid Using Credit Repair Companies – These companies often promise quick fixes when what they largely do is help you correct inaccurate information on your credit reports (something you can do for yourself at no charge!). There are many scams that prey on people in debt.
Know what helps or hurts your credit, take the steps you need to build your credit – and put your hard-earned cash toward paying off your debt.
Nelnet Bank does not provide legal, investment, tax, or financial advice. This page and the information contained herein is for informational purposes only. This content is not meant to address the circumstances of any particular individual. Nothing contained in this article constitutes a recommendation or endorsement by Nelnet Bank. For specific advice about your unique circumstances, consult with a qualified professional.