A Few Ways to Boost Your Credit Score

Good credit is essential. Whether you want to buy a car or a new home, start your own business or just get the best rate possible on the credit cards you use on a daily basis, without good credit you may be unable to do these things –or you’ll be faced with very high borrowing costs and interest rates. Having a poor credit rating can even cost you a job, as many employers actually run credit checks on candidates they are thinking of hiring and a poor credit rating is considered a sign that someone may be irresponsible or a theft risk.

Following are a few ways to help boost your credit:

  • The first step in building good credit is establishing a credit record for yourself by taking out and using at least one or two credit cards to show that you are responsible enough to handle credit and pay back money lent to you in a timely manner. Paying cash for everything may seem like a good idea, the absence of a credit record can keep you from getting a loan when you need one.
  • While establishing credit is important, it is equally important to make sure that you don’t take on too much debt, as that too can make you seem like a risk.
  • Make sure to pay off the balance on your credit cards and to do so on time. If you must carry a balance, be sure to keep it low because carrying a high balance can negatively impact your credit score. Paying bills late, even if it is only by a day, not only results in penalty fees, but can negatively impact your credit score.
  • If you have multiple credit cards, be sure to keep your oldest one open –even if you only use it to make one or two minor purchases each month. Not only do the credit rating agencies look at how much debt you have, they also factor in how long you have had your accounts and having a long-term relationship with a lender is a major factor in your credit score.
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