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How To Raise and Maintain a Credit Score


A good credit score can give you a lot of advantages, such as easing the way to car loans and mortgages. But how do you get your score high and keep it there?  

  • Keep track of credit utilization, which is the ratio of your outstanding credit card balances to your credit card limits. For example, if your balance is $500 and your credit limit is $2,000, then your credit utilization for that credit card is 25%. Try to keep your rate below 30%.
  • Dispute credit report errors — A mistake on a credit report may pull down your score. You're entitled to a free report every year from the three major credit bureaus — Equifax, Experian and TransUnion. Use AnnualCreditReport.com to request the reports, and check for mistakes — payments marked late when you paid on time or negative information that's too old to be listed. Dispute errors to get them removed. Credit bureaus have 30 days to investigate and respond.
  • Pay down debt strategically — A card with a high utilization ratio should be paid down first to bump up your score.
  • Consolidate your credit card debt into one balance transfer card to make it easier to manage your monthly payments.
  • Use a secured credit card — To build credit from scratch, use a secured credit card backed by a cash deposit: You pay up front, and the deposit amount is usually the same as your credit limit. Use it like a regular credit card; on-time payments help your credit.
  • Keep credit cards open — Did you know that closing credit cards doesn't help you improve your credit profile? Closing a card means you lose the card's credit limit when credit utilization is calculated, possibly leading to a lower score.
  • Mix it up — If you have only credit cards or only loans, consider getting the type of credit you don't have. Having installment accounts and revolving credit can boost your perceived creditworthiness.
  • Pay bills on time — This is a big one, as payment history has the single biggest effect on credit score. Late payments can stay on your credit reports for seven years. If you miss a payment, call the creditor immediately. Arrange to pay up if you can, and ask whether the creditor will consider no longer reporting the missed payment to the credit bureaus. Get current on the account ASAP. Although every month an account is marked delinquent hurts your score, the impact of a missed payment fades over time. Showing lots of positive credit behaviors after a misstep can help offset damage.
  • Set up autopay for your regular bills, like mortgage and car loan payments, so you never forget to make a credit card payment.

Polish your credit to make life easier by giving you a better chance of qualifying for the best terms on loans or credit cards. Building credit takes time and discipline. Your healthy habits will help boost your scores.

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