5 Ways to Improve Your Credit Score

The smallest payment incident or late payment immediately impacts your credit score, while—conversely—it takes time to regain each point. Fortunately, there are strategies that can improve your credit rating and more quickly recapture an acceptable score in the eyes of financial institutions. Here are 5 ways to improve your credit score.

Pay your bills on time

This is certainly the first principle to follow. Because while paying your bills on time helps you regain points, it especially lets you not lose any more of them. Indeed, paying your bills—at least the minimum amount due on your credit card or line of credit—is a good habit to acquire in order to not make the situation worse and to slightly increase your rating.

Limit your loan applications

When you are rebuilding your credit, it’s clearly advisable to limit your reliance on loans, but also to avoid filing large numbers of loan applications. The simple act of filing multiple loan applications, even if you don’t follow up on them, has an impact on your credit rating. It is therefore preferable to shop around, choose the most attractive offer, and then—and only then—authorize the selected banking institution to check your credit report in order to grant the loan.

Use your credit card intelligently

Paying with your credit card can help you regain points on your score, as long as you use it intelligently. Indeed, you should know that the card generates the most points when it is used up to one-third or even half of its limit; beyond this limit, credit agencies consider the user not to be a good manager.

Apply for a secured credit card

If you don’t have a conventional credit card and you have a bad credit rating, you don’t have much chance of obtaining one. However, you can apply for a secured credit card. This is granted to people with a score lower than 500 points if they make a deposit equal to the credit limit at the financial institution. This locks the amount in an account and thereby ensures that the purchases made with the card will be covered, even if you don’t pay your credit card bills. Once obtained, this card should be used like a traditional credit card in order to be useful and regain points. In other words, you shouldn’t exceed 50% of the authorized limit.

Check your credit rating annually

It’s not uncommon for credit reports to contain inconsistencies and errors that may affect your credit score. It is therefore advisable to check your report each year to know where you stand, but also to detect potential anomalies and—if necessary—have them corrected.

Although rebuilding your credit takes time, since negative information remains in the consumer credit report for 3 to 6 years, there are ways to regain some of your lost points in just 1 year. Rebuilding your credit lets you recapture the trust of lenders, and once you reach a certain threshold, you can apply for a conventional loan to make a real estate purchase, for example.