Your credit score affects nearly all aspects of your financial life. It might influence your loan approval, the rates you pay on an interest loan, or even whether you qualify to rent out certain apartments. This is the good part-your credit score is not set. With some good habits, it can increase. Here are a few basic ways you can begin working on it now.
Keep credit utilization low
One of the biggest factors that affects your credit score is how much of your available credit you are using. This is called your credit utilization rate. Experts recommend keeping your utilization under 30 percent of your total available credit. For example, if your credit limit is $10,000, try not to carry a balance higher than $3,000. Paying down balances across multiple cards can also help keep this number low.
A high utilization rate can make lenders think you rely too heavily on credit, which can hurt your score.
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Ask for higher credit limits
If you are in good standing with your bank, one quick way to bring down your utilization rate is to ask for a higher credit limit. A higher limit lowers your percentage of credit used, even if you do not change your spending. Most banks will review your account and can increase your limit with just a phone call. Just remember that this only helps if you do not use the new limit as an excuse to spend more.
This is one of those small steps that can have an almost instant impact on your score.
Avoid closing old accounts
The length of your credit history also matters. Closing old accounts can shorten that history and lower your score. Here is what you can do:
- Keep older credit cards open, even if you do not use them often.
- Put a small recurring charge, like a streaming subscription, on the card so the account stays active.
- Paying off that charge each month shows consistent, positive credit activity.
The longer your credit history, the better it looks to lenders.
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Check and correct errors on your report
Mistakes on credit reports are more common than many people realize. A missed payment might be reported in error, or an account could be incorrectly linked to your name.Here are a few tips for you:
- You can request a free credit report once a year from each of the three major bureaus: Equifax, Experian, and TransUnion.
- Review the reports carefully for errors or accounts you do not recognize.
- If you find a mistake, you have the right to dispute it. A Credit Challenge Letter with proof of payment can correct the error.
Removing false negative marks can quickly raise your score.
Get credit for payments not usually reported
Many of the bills you pay regularly, like rent, utilities, or subscription services, are not always reported to credit bureaus. That means you might not be getting credit for consistent on-time payments. However, some services allow you to link rent and utility payments to your credit report. Even small recurring payments, such as Netflix or a gym membership, can keep accounts active and over time, these payments build a positive credit history.
As one financial expert explained, “These payments can amount to a lot each month, and over the course of a year, Americans spend thousands.” Reporting them can give your score a noticeable lift.
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Why improving your score matters
A higher credit score does more than just look good on paper. It can save you thousands of dollars in interest and give you more options when it comes to loans, housing, or even job opportunities. Small steps today—like keeping balances low, disputing errors, and making sure every payment counts—can set you up for better financial stability tomorrow.
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