Credit-Health Habits

If your credit score isn't quite where you want it to be, do you know what you can do to improve it? Many people think that they should just sit around and wait until it gets better, but this can be a slow process if left to its own timetable. Instead, here are a few tips that you can put into practice to help improve and maintain your score:

Exercise patience

First and foremost, you must understand that credit scores do not get better overnight. While it seems that they can go down the tubes very quickly, getting them back up requires considerably more time and effort. It could take six months or more for you to start seeing a noticeable change in your credit score once you begin working to improve it.

Don't work against yourself

The most important (and smartest) thing you can do to do improve your credit score is to stop doing things that cause it to go down. Debts that are not being repaid have the biggest negative impact on your FICO score. So, be sure that all your monthly payments are made regularly and on time. One late payment can cause a mark on your credit report that could haunt you for the next seven years.

Control your spending

While it's perfectly fine (and even advantageous) to have credit cards, you must remember that they are not cash; they are essentially small lines of credit that you have to repay. Don't go on a spending spree that you don't have the cash to pay for. Keep your overall debt low, as the next point suggests.

Maintain low account balances

Keep the balances of your credit card- and other revolving accounts low or fully paid off. This helps to give the appearance that you have your financial situation in order. The higher your balances rise and the longer they remain that way, the more of an impact it may have on your score.

Be aware of your total debt

Your credit score takes into account your total debt. Some people use credit card transfers to move their debt around from one card or loan to another. While this may look as though they've paid off one debt, their credit score will reflect that it's simply been shifted to a new location. Balance transfer or consolidation credit cards that offer no interest charges for a period of time can be a great way to get the upper hand on your debt, but they probably won't improve your credit score very much until you actually pay the balance down.

Forego new cards

Until you get your credit situation back in order, try to stay away from signing up for new credit cards or any additional debt. Not only will any charges you make be added on to your total debt, but the application for new credit will also allow the lender to order a copy of your credit report. Excess inquiries on your credit report will cause your score to suffer.