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We all want to know the quick fixes to help raise our credit score, but there are ways to invest in your credit score’s health for the long term, so you don’t have to constantly worry about raising it. If you want to keep your credit score in the healthy range, here are some tips on how to achieve that:
This is the #1 way that people hurt their credit scores. They figure missing a payment won’t be a big deal, and in the grand scheme of things, it’s not. But if you keep convincing yourself that it won’t be a big deal, it might start to become a pattern. And whether you pay your bills on time or not is one of the biggest factors when it comes to your credit score.
That being said, if you miss one credit card payment, don’t panic. Pay your bill and then call your credit card lender and ask them to if they could keep the late payment off your credit report. If it is your first time being late, they are usually pretty forgiving and will agree to keep your credit report clean.
Only having one kind of credit can drag your credit score down. While credit cards are a great contributing factor to a healthy credit score, only having credit cards doesn’t show that you know how to handle large credit, such as loans or a mortgage. Having a student loan, auto loan, mortgage or other online loans can help show lenders that you know how to handle multiple types of credit and will strengthen your credit score.
This may seem counter-intuitive, but the higher your overall credit limit, the better your credit score can be. One of the main factors that determines your credit score is your credit utilization ratio, which measures your overall credit limit against your overall credit card balance. So if you have an overall credit card balance of $500 and an overall credit limit of $1,000, your credit utilization ratio is 50%. Most credit experts advise to keep your rate below 30%, but the lower it is, the better your credit score will be.
Even if you are diligent about paying your bills on time and keeping everything else in your credit report healthy, errors can creep into your credit report and hurt your credit score. Credit card lenders can make mistakes when reporting to the credit bureaus, and even the credit bureaus can make mistakes when compiling your credit report. The best thing to do is check your credit report at least once a year for errors. You can check it for free once a year at annualcreditreport.com. Or you can keep an eye on it more often with a credit report monitoring service, which will also help protect against identity theft. If you find errors on your credit report, you can either contact the individual bureaus that the error appears on (Equifax, Experian or TransUnion) or you can contact a credit repair company to fix the errors for you. Here’s a good list of the best credit repair companies.