Finances & Debt

The 5 Best Ways to Improve Your Credit Score

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5 Ways to Improve Your Credit Score

Looking to improve your credit score? Here are five ways to give it a boost — and maybe save some money while you’re at it.

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Of all the painless ways to save money, improving your credit score could be the most important. A good credit (FICO) score can save you a small fortune in rates and terms on everything from home and car loans to credit cards and car insurance. Follow these words to the wise.

  • Pay all your bills on time. Seriously. Just do it. Your payment history makes up 35% of your FICO score.
  • Raise your credit limit. This will expand your credit. But only do this if you trust yourself to stay tame on your spending (you know who you are).
  • Keep old cards active. Closing out a credit card can actually lower your credit score because your length of credit history counts. Try using an old card to pay for one recurring thing, like a utility bill.
  • Under-use your credit cards. Ideally your credit utilization ratio (your card's balance divided by its credit limit) shouldn't be more than 30 percent.
  • Become an authorized user. If it's hard getting your own credit card, convince a family member or friend to add you to their existing account.
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