Credit score can be influenced by a number of factors. Some factors, however, can decrease your credit score such as missed or late payments, collections, and judgements. There are many ways to increase your credit score, and they are easy and free.
Being punctual
On-time payments are one of the most important aspects in building credit. FICO estimates that about 35% of credit scores are based on payment history. It is crucial to pay the minimum amount on all bills and, if possible, more every month.
Payment history
Your payment history is one the most important factors in credit scores. It accounts for 35% to your overall score. Your payment history tells lenders how likely you are to make payments on time. Your payment history is the most important component of your credit report. It is therefore important to make timely payments. You can still improve your credit score by not making late payments, but it is best to make an effort to avoid them.
Credit utilization ratio
It is important to understand how credit utilization works. Your credit utilization ratio measures the amount of credit that you have used minus the amount of available credit. This number will allow you to determine your debt management level. A credit utilization ratio of less than 30% is the best.
Diversifying credit
Diversifying your credit portfolio is one of your best options to increase your credit score. While it is important to have credit of various types, it is also important to ensure that your credit is not being overused. You should have both revolving and installment loans in your credit mix.
Apply for quick loans
You can get quick loans to help in emergency situations. It may take several days for you to receive the money you need. These are less risky than unsecured borrowing, which can take many weeks to be approved. A friend or family member can lend you money. Although this is more costly than traditional loans, it's faster. Just remember that you will have to sign a loan agreement. You should also build an emergency fund so that you can borrow money quickly when you need it.
Charging for collection or charge-offs
Negative credit scores can be affected by charge offs. Generally, they stay on your credit report for seven years. Fortunately, you can take steps to rebuild your credit and get back to a high credit score. While these steps are not quick, they can have a significant impact on your credit report.