Pay bills on time: Consistently make all your payments on time, including credit cards, loans and utilities. You can set up reminders or automatic payments to ensure you never miss a due date.
Keep credit utilization low: Aim to use less than 30% of your available credit, ideally closer to 10%. For example, if you have a card with a credit limit of $10,000, try to keep your balance on that card below $1,000.
Diversify credit types: Maintain a mix of credit accounts, such as credit cards, installment loans and retail accounts. Having a mortgage, a car loan and a credit card demonstrates your ability to manage different types of credit.
Limit hard inquiries: Be selective about applying for new credit and space out your applications to minimize the impact on your score. For example, apply for new credit only when necessary, and avoid multiple applications within a short period of time.
Monitor credit reports: Regularly check your credit reports for errors or discrepancies, and address them promptly. You can get a free report annually from each of the three major credit bureaus at AnnualCreditReport.com.
Maintain long credit history: Keep older accounts open to build a lengthy credit history. For example, if you have an old credit card you don’t use often, keep it open and make a small purchase occasionally to keep it active. (Just don’t forget to make your payments.)
Avoid closing accounts: Closing accounts can reduce your available credit and increase your credit utilization ratio. If you need to close an account, just make sure it won’t negatively impact your credit utilization or the length of your credit history.
Pay more than the minimum: Whenever possible, pay more than the minimum payment to reduce your overall debt faster. If your minimum payment is $25, consider paying $50 or more, if possible.
Use credit responsibly: Avoid maxing out credit cards and make thoughtful, planned purchases. Creating a budget can help you both manage your spending and stick to your plan.
Seek professional advice: If needed, consult with a financial advisor to develop a personalized strategy for improving your credit score. They can provide tailored advice based on your financial situation and goals.