Here are some ways to raise your credit score, but be patient – it may be two to three months before you see the increase.

Correct your credit history. Reviewing your credit report and correcting mistakes can raise your score, which is based on your credit history.

Reduce the amount you owe on credit cards. Pay down all card balances, so the total amount you owe is below 30% of your total available credit.  This is called your “utilization ratio.”  If your total available credit is $10,000, for example, you want to owe no more than $3000.  Pull your credit report and confirm your credit card companies are reporting your credit limit.¹

Start using a card you haven’t touched for a while. This sends a report to the credit bureaus, increasing your available credit and helping the utilization ratio. And since the length of your credit history contributes to 15% of your score, using an old card might help there too.

Pay all bills on time. We know what you’re thinking. This one is worth mentioning, however, because just one 30-day late payment can lower your credit score 40 to 80 points or more.² Do what you can to always pay on time, even if you’re only paying the minimum.

Focus on revolving accounts versus installment accounts. Revolving accounts, such as credit cards, let you carry a balance and pay a monthly minimum amount. Installment accounts require you to pay a fixed amount each month, like an auto loan. If you have money available, use it to pay down your credit card balances, not to pay off your auto loan sooner. This is because your credit score is heavily weighted to revolving accounts.

DON’T open a new account. This lowers your score temporarily and makes a new creditor, like a mortgage lender, less eager to open another account for you.

DON’T close any accounts. This lowers the amount of credit available to you and therefore lowers your credit score.

¹ Source: https://www.investopedia.com/terms/c/credit-utilization-rate.asp

² Source: https://blog.equifax.com/credit/can-one-late-payment-affect-my-credit-score/

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