Looking for advice on how to improve credit score? If you are thinking about buying that new car or a home in the near future then you are going to want to have the best FICO credit scores possible. And when the advice comes in right on time you are going to have some time to fix your credit and increase credit score so you get a loan with favorable terms.
Keep in mind that improving credit scores isn’t just for people with less than perfect credit. Those people who have no credit, or have not established a good credit history to begin with, may need a few tips on how to increase credit score to show enough credit history to qualify for a large loan.
Here are some helpful tips on how to improve credit score over the next several months.
Pay Those Household Bills On Time
One way to improve your FICO credit scores is by paying your household bills on time. That gas, phone, and electric bill that you receive monthly can hurt your credit if you are often late paying these bills.
Most lending agencies feel if you can’t pay the necessary bills on time then it is unlikely you will make timely payments to them. So, make sure those bills are paid before the date due to show that you are responsible at paying your bills.
How Credit Cards Help Improve Credit Score
Knowing how to improve credit scores by using credit cards effectively can actually raise your credit scores. However, keep in mind that using them carelessly will do more harm than good. Here are some tips on using credit cards to increase credit score.
- If you don’t have a credit card get one. Use the card sparingly and make sure you pay off the balance each month. This not only helps improve your credit ratings but also shows that you have credit available, which is something lending institutions look for.
- If you already have a credit card or more than one, make sure your payments are made on time. You may also want to pay down those credit cards to show more available credit or to reduce credit use.
- Don’t switch from a credit card company to another too often and don’t apply for too many cards as well. By keeping just one or two cards current and making payments on time you are showing lenders that you are responsible about how you spend money.
How to Improve Credit Score with an Installment Loan
As strange as it may seem, taking out a small installment loan can actually help you to get that big installment loan you want in the future. Consider taking out a small personal loan from a bank or other lending institution.
By taking out a small installment loan and making your payments on time and perhaps, paying it off a little early you are proving that you have what it takes to make those monthly payments that are necessary to paying off a large loan.
Keep in mind however, that you don’t want to take advantage of all the credit you may have available. Keeping available credit within manageable limits will do more to improve your credit ratings than to have several credit cards with high credit limits available.
After all when you go apply for that car or home loan you want your lender to see that you don’t have the potential for using all your available credit by making charges to those credit cards after getting your loan.
Overall, knowing how to improve credit score and doing those things necessary to get your credit rating where it needs to be will help you to secure that big loan for a home or a new car.