4 Tips for Improving Your Credit Score

child-support-calculatorImproving your credit score can be a slow and painful process, but if you continue to follow the right path, it is possible get back on track. The key is not to think of the process as a series of quick tricks, but rather as a continued commitment to managing your debt responsibly. Here is a look at some of the best things you can do to get a better score.

Tips for Improving Your Credit Score:

  • 1) Cut down what you owe. This is perhaps the most difficult answer for improving your credit score, but it’s also the most important. 30 percent of your credit score is simply how much you owe in relation to your total credit limit. Watch out for quick tricks such as opening or closing new credit cards just to change your credit limit. These shortcuts could harm you in the long-run. Instead, set a budget, and pay down your balances to a healthy ratio with your credit limit (in the area of 30 percent or less). Be sure to also pay off any debts that may be in collection. This should be your first step if it is an issue for you. Paying your bill won’t remove the collection from your record, but it will set you back on the right track.
  • 2) Keep using your credit cards, but keep on top of them. People who struggle keeping good credit may be tempted to quit using credit cards altogether, but having a credit history is a big part of building a good score. If you continue to use credit cards responsibly this can help you repair your score more quickly. A good credit history will also mean that any future problems will have a smaller impact on your score.
  • 3) Take New Credit Carefully. If you have a relatively short credit history, you need to be very careful about the way that you take on new debt. Formal inquiries into loans can affect your score, and so can opening new cards. Try not to open too many accounts at once, unless you absolutely have to. The sudden surge in new credit can give bad signals about your financial health.
  • 4) Shop for new debt in a short period of time. Part of how FICO distinguishes between people shopping thoroughly for a single loan and people looking for multiple loans is by the space of time between inquires. To avoid any misunderstandings, focus your debt inquires and shopping into a short period of time. This will help you avoid creating the impression that you are looking for multiple loans because of financial difficulties.

Improving your credit score can be a long and frustrating journey or a steady climb to recovery, depending on your situation. Unfortunately, there is no silver bullet to getting an excellent score. These tips will help, but above all, everyday diligence in paying bills on time is the secret to an excellent score.

Julian, Crowder & Shuster is a Lewisville bankruptcy law firm. We practice family law, bankruptcy law and criminal defense.


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