5 Ways to Improve Bad Credit

To rebuild your credit history, you do need time and to be responsible with your credit. If you pay attention to these five credit habits, your credit score will go up.

Keep track of your money. If you have a bad credit score because you spend too much, you'll be surprised at how helpful it is to keep track of what you spend. There are a lot of free ways to do this, like using online tools or free apps. Without a plan, it might be too easy to spend too much and go into debt.

Pay your bills when they are due. With the FICO score, 35% of your score is based on how well you've paid your bills in the past. So, make things easy for yourself. Send yourself emails and texts when bills are due.

Keep your usage rate low. The amount you owe is the second most important part of your credit score. The amount of credit you've used compared to the amount of credit you have available is your utilization ratio. Keep your ratio on your credit card under 30%. But keep it under 10% for a bigger boost.

Don't take out any new loans. Your score could go down by up to five points every time you apply for credit. For now, you should focus on how to use your new credit card well. After about six months, when your score has gone up, you can think about getting another card.

Pay down your debt on credit cards. This is a win-win situation. First, you feel free when you're no longer in debt. Second, this process makes more credit available to you, which lowers your usage ratio and raises your credit score.
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