Have a bad credit score and don’t know how to increase it?
With the average national credit score at 687, there is always room for improvement.
If you’re one of those looking to increase your credit, you’re in luck. The personal finance experts at Varo Money, a digital banking app for ambitious, responsible millennials who are hands-off with their money, have put together a list of tips to help improve your credit score:
- It’s ok, in fact helpful, to responsibly use credit; installment loans are a good way to lower high interest rate credit card debt or finance major purchases and have a stable monthly payment, revolving credit can be a useful way to cover expenses in short-term. Auto loans, student loans, mortgages and home equity credit are all ways to improve quality of life and achieve goals provided they are used responsibly.
- Always pay your bills on time and if revolving balances try to pay more than the minimum payment
- Try not to utilize more than 30% of your available credit on revolving lines for long stretches of time
- Avoid applying too frequently for offers of credit, too many hard credit bureau inquiries can be viewed negatively when applying for credit
- Be careful not to fall into debt traps where it becomes difficult to pay-off high interest rate loans and credit card debt. Better to curb spending and consider making more structural changes (move to lower cost area, have less expensive car, etc.) than to rely on credit to finance a lifestyle you can’t afford.
- Always plan to spend less than you earn.
Source: Varo Money