A low credit score can cause us many problems, such as not being able to purchase a new home and getting locked out of making financial transactions because our bank is freaking out over the risk involved with loaning us money.

  1. Pay All Bills on Time and Don’t Miss Payments

Most experts agree that paying your bills on time is the best way to increase your score. Rewards cards are a great place to start practicing if you haven’t been doing so already because there’s no interest charged, and the cost of signing up for one can be less than $50.

  1. Get a Credit Report

Having a credit report can be invaluable in finding out what’s on there and how to fix it. This is especially true if you have a low credit score because the banks are more reluctant to lend you money, but your report will also show that you’re more likely to miss payments and not pay off bills on time. You can even find a credit repair company to help you monitor and raise your credit score.

  1. Pay Off Debt

There’s no such thing as too much debt when repairing or improving your credit score. Credit cards are great for making minimum payments throughout the year, but we all know that will not happen. Pay off your entire credit card balance every month, even if that means being late on your statement.

  1. Don’t Overuse Credit Cards

Credit cards are designed to be used sparingly and only to spend money and get rewards, but they’re often used to purchase things we can’t afford to pay off the balance within the grace period. If you aren’t going to be able to pay off the full balance within the grace period, then don’t use it anymore. Paying the minimum payment each month isn’t a good way to increase your score since you aren’t any closer to paying everything off in full.

  1. Don’t Open Too Many Accounts at Once
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Too many accounts can create a lot more problems than their worth. If you are trying to establish credit for the first time, it’s best to apply for one card at a time and then wait 3-6 months before applying again. This is especially important when using online application portals if your credit report will be scoured by dozens of debt collectors looking for new customers.

  1. Go Easy on New Credit Cards

Just because someone is offering you “free money” doesn’t mean it’s the right thing to do. Before buying a new car or taking out a student loan, you should wait at least 6 months between opening and closing accounts. You also have to make sure you’re making the minimum payments each month.

  1. Consider a Debt Consolidation Plan

If you’re carrying a lot of debt, paying off the minimum balance each month won’t cut it. You’ll need to get on a plan with a consolidation company to help you pay off your debts faster. This includes paying off everything on your credit cards, paying down your mortgage or car loans, and personal loans.

  1. Set Up Payment Reminders

Many things can go wrong with your bills, especially after you move. If you haven’t moved recently, here’s what you should do: set up online payment reminders or alerts using your bank’s website, use a bill organizer to help remember all your bills throughout the year, and carry a reminder card with all of your due dates and phone numbers to remind you when something is coming due.

A credit score is more important than most people realize because it can impact our ability to get loans and open new accounts in the future. Improving or repairing your credit score takes some time and will involve a few small sacrifices, but it will be well worth it in the end. Just remember that paying everything in full each month is the easiest way to create good credit and avoid ruining your score in the future.

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