Your credit score is a number that lenders and businesses use to access your worthiness. A number of unexpected happenings in your life can cause you to go through a financial hardship that causes stress and reduces your credit score drastically. Unfortunately, throughout your lifetime it’s very likely that you’ll need to borrow money for various things. For this reason, it’s very important to do everything you can to maintain a high score.

Misfortunes of a Poor Credit Score

Having a low credit score can affect every aspect of your life. It can cause you to pay more for things like a mortgage and a car loan. Improving your score gives you a golden ticket and opens the door to endless savings. You don’t have to put deposits down for utilities, you save money with lower interest rates and you can apply and get a motorcycle insurance quote from any reputable company without the fear of getting turned away.

Make Timely Payments

One of the best ways to start to improve your credit score is to pay your bills on time. Per the three primary reporting companies, your payment history makes up 35 percent of your score. By making your current payments on time you show lenders that you are making the effort and even if you have a few late payments in the past, you can explain those to a bank.

Pay Down Debt

Lenders also pay close attention to your spending habits and in particular your debt to income ratio. While there is no exact percentage that banks use, they generally want you to remain below 30 percent of your limit. If you have several credit cards and they are either maxed out or close to their available credit limit, reducing them to less than the 30 percent will help you increase your credit score in a relatively short amount of time. There are a few ways to do this. First, you can apply for a new card that allows for interest-free balance transfers for a period of time. Or, if you are not able to qualify for a new card, take the one with the highest interest rate and works towards paying that one down and then move on to the next one.

Reduce the Number of Inquiries

While inquiries are a small percentage of the comprised credit score, the more inquiries you make in a short period of time can prevent your score from remaining in good standing. If you are in the process of applying for a loan or a credit card, do a thorough review of the companies and their rates online and only apply for the ones that meet your standards. This will help you to avoid many inquires at once.

Review Your Report for Any Mistakes

While it may not be the case for you, many people in the past have found mistakes on their credit report. If you don’t review it, you’ll never know. Perhaps you weren’t late with a payment and the company reported it late. If you address this discrepancy quickly and dispute it, you have the chance to get it removed before it does damage.
You live in the age of technology, and while it’s great, it also means that your credit history and current status are in play. Maintaining a healthy credit score opens the door to a bright future filled with opportunity at the lowest out-of-pocket costs.