Want A Higher Credit Score? Do These 2 Things Every Month And Watch Your Number Climb
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A higher credit score is essential even for people who rarely use credit cards.
The higher a credit score, the easier it is to get lenders to hand over money to buy a house, finance a car, start a business, or do anything that involves a loan.
According to Experian, the average American has a score of 711. While this number is good, any number above 740 looks far better to potential lenders. Credit scores above 800 will open way more doors.
So how can a person get a credit score above 800?
CNBC Make It explains that the two biggest factors to an exceptional score involve doing two things every month.
Take these two steps every month and your score will go from good to exceptional in no time.
Step One: Pay Off Your Bills On Time And In Full Every Month
Payment history is the most important factor in boosting your credit score.
Paying your bill on time and every month is crucial in keeping the credit score above the “very good” range.
“You want to pay off your entire bill to avoid accruing interest, making the minimum payment each month is enough for a completed payment on your credit report.
If you can’t afford your entire bill, make at least the minimum payment to remain in good standing.”
While paying off an entire credit card bill isn’t possible for most people, making the minimum payment should is a no-brainer. If you can’t pay off the entire credit card debt in full, we suggest making an additional payment each month on top of the minimum payment.
Just putting an extra $20-30 towards a credit card bill each month will go a long way in getting out of debt and raising your score.
This brings us to step two to raising your credit score.
Step Two: Keeping An Eye On Your Credit Utilization
Credit utilization is the amount of debt you owe versus the total credit line offered by the credit card company.
CNBC suggests keeping this number below 30%.
“If you have a credit card with a limit of $10,000, aim for a balance of no more than $3,000 at one time.
Do this by limiting your spending, making payments throughout the month or asking for an increased limit.”
The remainder of your credit score is determined by factors such as how long you’ve had accounts open, the variety of cards used, and the last time you applied for a credit card.
Credit card experts suggest not apply for too many accounts in a short time span. This will cause your score to go down.
For more advice on your credit score, check out 5 ways to make more money just by improving your credit score or the best starter credit cards to help build credit.