5 Simple Ways to Improve Your Credit Score

Your credit score influences everything from your mortgage to getting approved for business loans. If you own your own business, your credit score is probably something you think about often, especially when it comes to making financial decisions.

Is your credit score in need of a boost? While credit scores don’t improve overnight, there are a few simple things you can do to change your score in a relatively short period of time. We aren’t talking days, but if you have patience and keep a close eye on your finances, you will see improvement.

Here are 5 simple ways to improve your credit score.

1. Get a copy of your credit report

By law, you are allowed one free report every year. Visit AnnualCreditReport.com if you haven’t done so already. After you receive it, be sure to print it off or save it for future reference. Once you have the report in your hands, look over everything. Be meticulous. Make note of any errors such as unpaid bills or late payments and then send a dispute so you can get these removed.

2. Always pay bills on time

This might seem obvious, but many people struggle to pay their bills on time every month. If you miss payments or consistently pay late, you’re hurting your credit score. Make all of your payments on time, every time.

3. Pay down credit card balances

Paying down your balances is a simple way to improve your credit score. Ideally, you should use as little of your available credit as you can. It’s generally recommended that your credit utilization, what you owe versus how much credit you have, is lower than 30 percent (10 percent is ideal).

For example, if you have a $10,000 credit limit and a $3,000 balance, your credit utilization is 30 percent. If you are over the suggested percentage, you can boost your score by paying down your balance.

If possible, pay off your balances or make multiple payments every month, especially if you use your card for everything and have the means to pay it off immediately.

4. Increase your credit limit

If you’re struggling to pay down your balances, see if you can increase your credit limit. This is a great way to improve your credit utilization, just don’t go crazy and spend more because you have more credit available.

5. Negotiate

We all go through rough times. If, at some point, you stopped paying your credit card bill, talk to a creditor to see if they can “erase” your debt. Figure out what you can realistically pay towards a debt and offer to pay a lump-sum or make monthly payments. Often times they will accept a lower amount if you are willing to pay a lump-sum, just be sure to get everything in writing.

Debt Restructuring

Need help restructuring your debt? KLC Financial can help! Contact us today for more information.