You might not think too often about your credit score and credit report, but they can have a huge impact on your life. Landlords, for example, can check to see how delinquent you've been in paying past obligations. Insurers, banks, and credit card companies can look into your credit score, too, with financial consequences. A high score can lead to a significantly lower mortgage rate, which can save you tens of thousands of dollars. Thus it's well worth learning about ways to improve a credit score so that your score is as perfect as possible.
Here are a handful of the many ways to improve your credit score.
- Fix those errors. One of the simplest ways to improve a credit score is to correct errors in your credit report that are dragging down your score -- such as a late payment that was paid on time or a sizable sum you never borrowed. You are allowed to request a free copy of your report each year from each of the credit-reporting agencies. There are three main ones, and they each offer ways for you to have mistakes corrected.
Having too many credit card accounts open might dent your credit score. but ironically, the act of closing a credit card account can hurt your score, too -- if you're carrying a lot of debt relative to your credit limit. It doesn't hurt as much if your debt is relatively low. Another way to improve your credit score is to only use a few of the cards, because the number of cards with balances owed affects your score, too.
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