No-Hassle Ways to Improve Credit Scores

Even if your credit report legacy is not perfect currently, you can utilize a few simple tactics to make appreciable improvements. Here, we'll provide five no-hassle ways to boost your credit score.

1. Make timely payments. You can do wonders for your credit report legacy by simply paying your bills on time every month. Late payments will seriously damage your credit score, and they tend to linger on your credit report for quite a while. Years later, you may still be dealing with the aftermath of a rash of late payments. On average, most consumers can raise their credit scores by up to twenty points if they pay every bill on time for just a single month.
2. Don't open up unnecessary accounts. Opening up a slew of new credit accounts will hurt your score because lenders view it as an act of desperation. Moreover, you will make the average age of your revolving accounts lower, which also decreases your score. In fact, reducing the average age of your accounts can lower your score by as much as ten points. Stores will try to entice you into opening up new accounts with discounts and other incentives, but resist the temptation. The 10%-20% one-time discount is not worth the years of interest expense you will pay or the damage your credit report will suffer.
3. A closed account is not erased from your credit report. Closing a credit account does not make it disappear from your credit report legacy forever. Unused and closed accounts remain on your credit report, and with closed accounts, they may even decrease your credit score. If you have a revolving account that you don't use, just cut up the card and keep the account open.
4. Minimize your balances. Creditors don't like to see a high overall amount of debt, and it will consequently hurt your score. Similarly, keeping a high balance relative to the limit on any one card will work to the detriment of your credit score legacy. Given this information, you should try to keep your balances to a minimum, both overall and on individual cards. If you must carry a large amount of outstanding debt, try to spread it out among your credit cards as evenly as possible.
5. Don't avoid debt entirely, but use it cautiously. Having no debt will not do your credit score any favors. You need to prove to lenders that you can maintain debt and pay it off responsibly. Thus, keeping a few credit cards and taking out an installment loan, such as a car loan, can actually be good for your credit report legacy. Without a doubt, a consumer with no credit history will have a worse score than a consumer with two or three credit cards with revolving balances (as long as they are paid on time). On the other hand, you have to pay these accounts on time and avoid using them excessively or they will do more harm than good.