Four tips to help you improve your credit score

It can seem like nearly everything today, from buying a new car, getting a business loan or even renting a new apartment, relies on having a good credit score.

But what if you’ve made financial mistakes in the past, or had tough times that have complicated your credit history? How can you improve your credit score?

Luckily there are proactive, positive steps you can take to build your credit score back up – from boosting your score with online tools, to taking out a payday loan to help establish new credit.

To help you get out of what can feel like an endless financial cycle of denial and rejection, and increase your choice of lenders and financial opportunities, here are some steps that can lead you in the direction of a 700 plus credit score.

1) Pay off debts

This may sound like the obvious solution, but it can be a challenge for many people to stop feeling like they’re drowning in debt.

If you are serious about raising your credit score, however, you need to eliminate some of what you owe. Start by setting a strict budget and put everything that is extra towards what you currently owe. 

The most important kinds of debt that impact your credit score are personal loans, student loans and credit cards. Making only the minimum payments on these kinds of debts can leave you paying them off for years on end. Bump up your payments as much as you can to bring your principal amount down faster.

2) Review your credit report

There are several places that you can now get a free credit report online. It’s important to understand exactly what your credit situation is, and what issues are affecting it, so you can make a plan of action. There may also be inaccurate information on your report that is impacting your score. Take a thorough look at your report and act on any errors quickly.

3) Use phone and utility bill credit

Most credit reports won’t cover smaller bill payment histories, like your phone or utility bills. But, if you have a great payment history, why not use that to help boost your current score?

You should be getting credit wherever you can. Online companies like Experian Boost can work with you to help add these types of household and personal bills to your record. You may see an immediate rise in your score.

4) Take out micro loans

If you have low credit or have not yet established any credit record, it can be tough to find anyone to lend you money. How can you establish good payment habits when few lenders will give you a chance?

This may be the case with traditional loans, but there are other options. Secured loans like a car title loan are a great way to start repairing or establishing your credit. You only need to put up a worthy piece of collateral to get a loan quickly.

Photo by Ian Espinosa