Raising your credit score isn’t as hard as it seems. If yours is low, you can improve it with a little time and dedication. A high credit score will get you better offers on credit cards, lower interest rates on loans and mortgages, and more. Here are three simple steps you can take to raise your score.
Pay Bills on Time
Pay your bills on time, every time. VantageScore, which is one of the main credit scoring models used by credit bureaus, gives the most weight to payment history. With the latest version, VantageScore 4, payment history makes up 41 percent of your score. If you pay your bills on time, your score will improve. If you’re having trouble remembering when to pay, set up autopay and/or set calendar alerts to help you pay on time.
Check Your Report
You can access your credit report from the three bureaus — Experian, Equifax, and TransUnion — for free once per week via annualcreditreport.com. (This is a pandemic policy and it’s uncertain how long it will continue. Regardless, you’ll still be guaranteed one free report from each bureau annually.) Check the report for inaccuracies that could be dragging down your score. It’s more common than you might think. In one study by the FTC, 25 percent of reports contained an error that negatively impacted the person’s score. If you find an error, report it so that your score can rebound.
Keep Usage Low
Your credit utilization ratio (CUR) is the second-most important factor considered by VantageScore. Your CUR is your total credit balance divided by your total available credit. You want your CUR to be 30 percent or lower.
Let’s say you have two credit cards with a total limit of $15,000. If your total balance on those two cards is $2,500, your CUR is 16.67 percent, which is great. However, if you have that same limit but your total owed is $6,500, your CUR would be 43.33 percent, and that’s not good at all. Keep your CUR as low as possible and watch your credit score creep higher and higher.