13 Ways to Improve My Credit Rating

13 Ways to Improve My Credit Rating: Credit is something that is so important in today’s world. If you want to basically do anything beyond work and pay rent, you need credit. Unfortunately, intentionally or unintentionally, many people fall into the trap of credit card debt, defaulted payments and a plummeting credit score. If you’ve googled “how to improve my credit rating” too many times, keep reading. It’s time to get started. Here are some definite ways to improve your credit rating.

What are the benefits of a good credit score?

A healthy credit score does a lot to help make your life easier. Here are some of the big advantages:

  • Lower interest rates
  • Higher credit limits
  • Access to more offers:
    • Better loans
    • Higher quality credit cards
    • Mortgages (with better interest rates)

Ways to improve my credit rating:

  1. Low credit utilization Ideally, you want your credit utilization no more than 30% of your maximum credit. Anything higher starts to tank your credit score. Basically if you have 4 maxed out credit cards, creditors will be very wary about giving you another credit card.
  2. Eliminate your balances This is even better. If you want to really improve your score, bring your credit card balance down to zero.
  3. Pay your bills on time Paying your bills on time shows that you can reliably handle your credit card debt without skipping payments and beginning to get behind.
  4. Be consistent – This means keep your expenses consistent. Try not to vary too much as it can hurt your credit rating.
  5. Age those accountsCredit card companies and lenders like to see a history. A history tells them a story of how consistent you are over the long haul with handling credit.

Additional things that can hurt your score

13 Ways to Improve My Credit Rating

  1. See if there are errors on your account – Make sure that your account is accurate. Having other people’s information (especially if they have bad credit) is a definite way to kill your credit rating.
  2. Check for fraud – If someone manages to hack your credit card account, it can ruin your score big time. Make sure that your accounts are secure. If your account is compromised, take steps to fix it right away. One of the better ways to do this is to consider professional help from someone like Lexington Law or LifeLock.
  3. Check if you’re linked to someone else – This is a big one. I remember one time my mother had her credit score run for a purchase and it was very low. Way lower than it should have been. Apparently, someone with a very similar name was tied to her accounts, and this person had decades of terrible credit. Make sure you are the only one on your account!

Other methods of improving your score

  1. Consider a credit builder card – These are known as “secured credit cards”. They are great methods of repairing your credit score or something to consider if you have no credit history. Some of them require a small deposit which will typically be your credit limit. As you prove yourself as a reliable user of credit, the limit will increase. If you want to learn more about this, check out this site. They have numerous secured credit card options that will help you make the best decision.
  2. Limit credit applications – Who hasn’t been asked “would you like to open a store credit card and save 10%?” Sure, that seems good but really, it can hurt you. Every time you open a new credit card, it hurts your credit rating. When you open a new credit card, it counts as a hard inquiry which impacts your credit score for a full year! Most hard inquiries can drop your credit score 5-10 points. This is important if your credit score is already shaky. Even worse, if you apply for the card and you are turned down the hard inquiry still effects your rating!
  3. Debt consolidation loans – This is an avenue to consider if you are paying a very high interest rate from your credit cards. Debt consolidation loans allow you to refinance your credit card debt to a lower interest rate, which saves you tons of money and lets you pay down your debt much easier. The one thing you want to look into before signing on with one of these programs is their fee structure. Specifically, you want to know if you will be penalized for paying back the loan early. If this is something you want to look into, check out: The Loan Exchange and Bad Credit Loans.

13 Ways to Improve My Credit Rating: Conclusion

Credit is so important in today’s world. From renting an apartment, to buying a car and even to buying a house – your credit follows you! It’s best to make sure that credit is on your side when you do this. Living a life with bad credit is a surefire way to increased stress, relationship issues, and health problems. Don’t fall into this trap! No item at a store is worth paying 20% interest on! Embrace the good credit lifestyle and you will save money, decrease your stress and live a more fulfilling life.

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20 thoughts on “13 Ways to Improve My Credit Rating

  1. These suggestions are really helpful. I am looking to get a mortgage for a new house soon, and I have realized that I really need to start working on my credit to make sure it will get me the lowest interest percentage on my loan.

  2. It’s so important to know your credit score and how to keep it healthy.
    I’ve learned my lessons over the years so I don’t over extend myself and make my payments on time.
    I think when you’ve had credit issues you learn after a while. I always pay my bills before they’re due and I check my credit score frequently.
    What is the biggest percentage of your income that debt should be?

    1. You have some great personal finance habits. As for your question, here is what I came up with:

      “Banks believe that the amount of your monthly debt payments should be no higher than 36 percent of your gross monthly income. Ideally, it should be around 10 percent, but if it’s less than 20 percent, you’re still considered to be in pretty good shape.”

  3. As a young adult you don’t think much about credit scores later in life but it does catch with you if you are not careful and aware of what good or bad can do to you later in life when are trying to purchase a item. I find credit card companies unfairly target students who are already may be deep in debt with things like student loans.

    1. Absolutely true! That’s why financial education at an early age is really important in order to avoid getting taken advantage of!

  4. Man this article was pretty eye opening. I’m 30 with no credit but past due medical bills. Nothing extravagant though thankfully. I never knew of the 30% rule. I’m definitley bookmarking this to reference.

  5. Dave,
    Have kept an eye on my credit score for years. When I went to purchase a vehicle last year, I was offered a great finance rate without any questions. This does make a difference to make an effort to keep your score at a high level, it will save you money in the long run.

  6. I have never heard of debt consolidation loans before but I can see that it can work well. However I am quite a newbie about this stuf. Which one is more suitable for me The Loan Exchange or Bad Credit Loans?

  7. This is great!

    I really enjoyed all of your tips and will be taking some into my everyday life to continue to keep my credit score good.

    I heard you are supposed to check your score at least once a year. I know that hurts your credit too, though. What do you think?

    It’s nice to know that I am doing things right after reading your post!


    1. Well a credit check (I believe) is counted as a soft check which doesn’t hurt your credit score. I receive them monthly from Mint. It’s good to know where you stand.

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