How To Increase Your Credit Score

First of all, ALWAYS keep in mind that when you get a credit card, the money that you have access to, 

IS NOT YOURS, always treat it that way, or else, you will become financially irresponsible and that will cost a lot on a long term.

Here are few factors or rules  you MUST go by if you want to keep your credit History/Score in good shape, or if you have gone through some finance hardship like most of us have, this will still work to turn things around for the better.

One: Payment on time:

Your credit score could get a serious hit if you are late to pay your balance dues. 

On time payment shows creditors that your are a good borrower who respects their trust in you. 

Two: Credit Utilization Ratio

Let's say your credit limit on a card is $1000, make sure that your balance every month after you make payments is always between 10% to 25% of your credit limit ($100 to $250). Of course, the creditors do not want you to pay your balance in full, they like you to keep a balance on your account so they can charge you some interests.

This will show creditors that you are a responsible borrower who will not start drowning in debts.

Three: Request credit limit increase after 6 months of accounts' opening            date

Most creditors review their borrower's credit history for evaluation every 6 months, so you keep your accounts in good shape with timely payments and small monthly credit balance, you can call your creditor and ask for a credit limit increase, what this will do if approved, is to decrease your credit utilization ratio:

Example: your credit limit was $1000 for the past six months and you always carried a monthly balance of 25% ($250), now you get approved for another $1000 dollars increase bringing your available credit limit to $2000, now the 25% of the $1000 becomes only 12.5%, your score will improve by tens of points.

Please note that this rule could be applied to the combination of your total credit cards limit vs your combined balances on all your credit cards. 

Four: keep an eye on your credit report

This way you can stay up to date with all your credit history activities, so if there is any suspicious activities, like accounts that you are not familiar with or any errors that may have been reported by creditors or collection agencies.

Five: Always negotiate for lower interest rates

Once you establish an OK credit score of 685 and above, call your creditors and negotiate the interest rate on the cards, lowering rates means that your credit line will cost you less and eventually, it will not cripple you with extra charges added to your balance. 

Six: Do NOT close your credit cards

You might think that closing credit card accounts will help you because it will lower your borrowing amount, MISTAKE, the credit bureau will count this action against you and lower your score. One of the factors that the system calculates your score is the credit history age, the longer you hold an credit account open and in good standing of course, the more positive impact it will have on your credit score.

If you follow these tips, in 6 to 12 months you'll have good credit score and it will keep getting better till it allows you to tackle bigger loan like buying a house.