Pay Down Debt to Improve Your Credit Score

Your credit score is a measure of financial health and companies like Rescue One Financial recommend several steps you can take to improve it, including paying down your debt, making payments on time and checking your reports for errors and contacting companies to correct them. Taking steps to improve your score can help you when it comes to financing for major purchases, such as a home or a car and can even help you get a job.

Decrease Your Debt

To improve your credit score quickly, start paying off your debt. Begin with the items that have the highest interest rate, such as credit cards and short-term loans. The faster you pay these off, the sooner you will see improvement in your score. Making small payments more frequently, instead of one large payment a month, can help improve your score, too.

Raise Your Limits

Payroll, Salary, Electronic Money, Using Debit Card

If you can get credit card companies to raise your limit and then not use that extra credit cushion, that will improve what is known as credit utilization. The more available credit you have, the higher your score. The important thing is not to keep charging up to your limit.

Check Your Score and Dispute Errors

Be sure to get credit reports regularly and check them over carefully to be sure there are no mistakes. Errors on your credit report can lower your score, so this is an important step to fixing your credit.

Don’t Cancel Cards

Once you have paid a card off, you are better off leaving it open and not using it than closing the account. This extra open credit increases your credit utilization score. Some cards require you to use them periodically. If this is the case, make a small purchase and pay it all off before the payment is due.

To improve your credit score, pay down debt, make payments on time and keep an eye out for mistakes on your report. That score will go up in no time.