Here are some basic tips to help improve your credit score if it has dipped down far enough that you get offered only the highest interest rates for loan products or denied credit. Keeping your credit score in good shape is a long term project, but with enough time you should be able to finance major purchases, like a car or a house with reasonable loan terms.
Time is needed to improve your credit score. Don't believe any quick fix schemes to fix your credit. If your credit is damaged, only time and the above tips will help improve your situation. Be patient and practice good financial discipline every time you receive your pay check.
- Always pay your bills on time. Late payments and collections activity negatively impact your credit score.
- Keep balances on your credit cards low. The average running balance should be around 30% or lower. A higher balance on just one of your credit cards can lower your credit score.
- Don't open new accounts for a better "credit mix." Open new accounts only when needed, additional open accounts will likely not help your credit score. Too many credit cards or other types of consumer credit can lower your score.
- Don't transfer debt from one credit card (or loan) to another. Pay them off instead. Moving around credit does not lower your overall debt obligation.