You can’t make a single change that boosts your credit score overnight, but you can take some simple steps to help improve it over time. The first step is to understand what makes your credit score. Your credit scores are based on information in your credit report that lenders can see when you apply for loans, credit cards or other products. Credit reports include your payment history, what types of accounts you have and how much debt you owe. A healthy credit score is a signal to creditors that you’re likely to pay your bills on time.
A good credit score is essential to many aspects of your life, and not just when it comes to getting a loan or mortgage. Your credit score may impact the cost of your car insurance or the terms of a cell phone contract, and landlords may use it to screen rental applicants.
If you’re not sure where your credit score stands, you can order a free Experian credit report to get an accurate picture of your financial standing. You can also sign up for a free credit monitoring service, which notifies you when your scores change and alerts you to possible identity theft.
One of the biggest factors in your credit score is how much you owe compared to the amount of available credit, known as your utilization ratio. You can lower this by paying down your revolving debt, which typically includes credit card balances, and by not opening new accounts.
It’s important to make your payments on time, since 35 percent of your credit score depends on it. If you’re more than 30 days behind, work on bringing it current as quickly as possible and consider setting up auto-payments with your lenders or services to prevent future issues.
If your credit report contains errors, you can ask for them to be corrected by filing a dispute with the credit reference agency that issued the error and the lender that provided the inaccurate information. If the credit reporting agency can’t verify that the information is correct, it must delete it from your report.
You can also check your credit score and receive personalized recommendations for improving it by signing up for Experian Boost. The free service credits your rent, utility and certain streaming service payments for on-time payments and helps you reach a better credit score by lowering your credit utilization.
Be wary of companies promising to raise your credit score, as they could be scamming you. The best way to improve your credit is to follow a solid plan that combines multiple strategies, such as those listed above. And be sure to monitor your credit and watch out for identity theft, as it can undo the work you put into building a positive credit history. how to fix credit score