Quick and Easy Ways to Improve Your Credit Score

By John Alexander - Jul 15, 2009

Over the past year, I’ve been able to improve my credit score by 100 points with a few minor changes to my financial habits. In order to understand how to improve your credit score, you must first understand how your credit score is calculated. Basically a credit score is determined by how much credit you currently are using vs how much credit you have available and how you’re meeting those obligations over a period of time. In laymen terms, if you pay your bills your credit score will increase over time. In order to improve your credit score, you have to use credit. I read a lot of articles about how credit cards are so evil and bad for you. Credit cards are not the problem. They are simply a tool that can actually help improve your credit. Did you know that when you make a purchase on your credit card, the credit card company gives you a 30 day graces period where they don’t charge you any interest on the purchase? If you use your credit card lightly and pay off the balance each month, you will have a ironclad credit score. I know what you’re thinking now. “It’s too late Sherlock. I already have credit card balances that I can’t pay off each month.” No worries friend, as long as you are making payments each month you’ll improve your credit. Another good thing to know about your credit score is that typically, creditors will only report to the credit agency if you bill is 30 days past due. So even if you make your payments a week or 2 after the due date, your credit score will still improve. If you are reaching a point where you’re having a hard time paying your current monthly obligations, consider consolidating your debt as it may reduce your monthly payments. Because your credit score improves over time, it’s a good to keep accounts open. The only way to lower your score significantly is by making payments 30 days past due or not paying your bills at all.