Simple Steps To Increase Your Creditworthiness
It is easy to unwittingly damage your credit score, but it’s not simple to return to previous levels of creditworthiness. Any careless act that damages your credit score will take time and effort to correct, so the best tactic is to perform actions that will increase your creditworthiness constantly and consistently to repair any damage that has occurred. There are some simple steps that can be used to increase your creditworthiness over time.
Pay All Of Your Bills On Time
Paying all of your bills on time is the single greatest thing that you can do to increase your creditworthiness. Many companies report late payments to the three major credit bureaus and each late payment reported on the accounts that you hold will decrease your credit score by a significant amount. Too many late payments can easily drop a credit score from excellent to poor in a matter of months and it may take years to raise the credit score back to its previous numbers. Making sure that all of your bills are paid on time will ensure that you will not damage your credit score with non-payments or late payments.
Keep Your Credit Usage Minimal
Once a credit card has gotten close to the limit, it will only take a minor disaster to push you over the limit of the account and damage your credit score. In fact, many lenders frown upon using more than 30% of your available credit at any given time and your credit score calculation takes this into account. The higher the percentage of credit used, the more it will damage your credit score. For the best credit, you will need to keep your credit usage minimal and pay off your balances whenever you are able.
Use Different Forms Of Credit
A varied credit profile that has been kept in good standing is much more impressive to lenders than a great credit rating based on a single form of credit. Diversity in your credit profile shows lenders that you are able to get credit for your needs and that you repay these obligations in the manner dictated by the agreement that was signed. Having a credit card, a car loan, and a student loan that you are repaying or have repaid is better than having just the credit card listed on your credit report.
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