7 Strategies for Improving Your Credit Score

Maintaining a good credit score is incredibly important. Your credit score can affect your ability to qualify for a loan, rent an apartment, purchase a home, or even land a job. If years of struggling with credit card debt have taken their toll on your financial standing, here are seven strategies to help you improve your credit score and get debt free:

  1. Always pay your bills – especially your credit card bills – on time. Defaulting on your financial obligations will have an immediate detrimental effect on your credit score, and paying in a timely fashion will also help you steer clear of potentially costly late fees and penalties.

  2. If you must continue to use your credit cards for purchases, the wisest strategy is to pay off your balance in full each month. This will keep you from accumulating interest on that balance, in addition to looking great on your credit report. If you can’t pay off your entire balance, at least pay more than the minimum amount required. Paying only the minimum is a one-way ticket to becoming mired in credit card debt!

  3. Never skip a credit card payment. As soon as you skip a payment, your interest rate will rise dramatically, making your monthly required minimum much higher and less manageable.

  4. Avoid maxing out your cards. Keep an eye on your credit limit and your balance by carefully reading your credit card bills each month, and if you’re in danger of going over your limit, curb your spending or stop using that card altogether. Reaching or going over your credit limit reflects poorly in your credit score.

  5. Don’t close credit accounts unless absolutely necessary. Once you’ve paid off the balance on a particular card, it may be tempting to close that account immediately. Don’t! Instead, cut up the card or remove it from your wallet, but leave the account open. Closing too many accounts will decrease how much credit is available to you, and will in turn negatively affect your credit score.

  6. Don’t open too many accounts. Just as you don’t want to suddenly close all of your accounts, you also don’t want to be opening new ones left and right. Creditors may see this as an indication of financial recklessness or a tendency to live beyond your means.

  7. Finally, get out of the habit of constantly inquiring about new credit cards. Even if you don’t accept the cards that are extended to you, repeated requests for more credit or additional cards may be viewed as a drawback on your credit report.

These strategies are a great starting point for improving your credit score, but you may need more assistance. For even more debt reversal ideas, try consulting a professional financial planner, or reading a book on the subject, such as Robert Allen Debt Reversal.