Start Now and Get a Jump on Improving Your Credit Score

With the new year right around the corner, that leaves you with precious little time to get your finances in order. Let’s explore a few tips that will help you get a jump on improving your credit score before the end of the year. So lets get start.

 

1. Pay off your credit card debt

The first step to improving your credit score is to pay down any existing debts. If you have outstanding balances on several different cards, pay them off in order of highest interest rate to lowest. Once you’ve paid off the highest-interest-rate balance, move onto the next highest-interest-rate account. You’ll want to make sure you’re paying at least the minimum payment each month, and ideally, try to pay more than the minimum.

2. Make two payments per month

Once you’ve paid off your high-interest-rate accounts, start making monthly payments toward your lower-interest-rate accounts. Ideally, you should aim to make two payments per month. This way, you’ll be able to build up a positive history on your credit report.

3. Don’t close unused accounts

If you don’t use your credit cards often, don’t close them out. Instead, keep them open and continue using them regularly. Closing an account doesn’t hurt your credit score, but not closing it out does.

4. Use a secured credit card

A secured credit card is a good option if you need a little extra cash right now. Secured credit cards require you to put some money down before they issue you a line of credit. However, once you do, you won’t have to worry about paying back the full amount each month.

5. Check your credit reports

You may already know that your credit scores are based on information found in your credit reports. But did you know that your credit reports can actually help improve your credit scores? To get a free copy of your credit reports, visit AnnualCreditReport.com.

6. Monitor your credit score

Your credit score is updated daily, so you’ll want to check it frequently. You can find your credit score online, and many banks offer their own versions of the score.

7. Improve your credit utilization ratio

The last thing you want to do is carry a balance on your credit cards. When you do, you’re putting yourself at risk for higher rates and fees. Try to keep your credit utilization ratio below 30 percent.

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