In a certain sense, you have direct control over your credit score. Sure, it’s computer by somebody else, but it’s computer based on your actions. So by taking smarter financial actions, you can in turn improve your credit score.
Here are some things you can do to achieve a better credit score:
1. Pay your bills on time. This is one of the best things you can do to improve your credit, because it’s given the most weight in the FICO scoring
model. Paying your bills on time (credit cards, auto loans, etc.) will raise your credit score faster than any other single action. Of course, the
Opposite is true as well.
2. Keep credit card balances low. Do your best to reduce your debt, starting with any credit cards you have. This is the second most important
factor that contributes to your FICO credit score. So now you have two marching orders — pay bills on time, and pay down your debt as much
as possible.
3. Keep your debt-to-income ratio at 20% or lower. In other words, your overall debt should not total more than 20% of your net monthly income.
If it does, focus on paying down the debt as quickly as possible.
4. Limit the number of loans / lines of credit that you apply for. Applying for credit too often can send the message that you cannot properly
manager your finances. Use credit and sparingly … only when you need it.
Most of the items on this list could be summarized as being financially responsible and managing debt wisely. Put these things in practice today, and your credit score will soon reflect your efforts!