Do you want to apply for a loan? One of the most important things you need to take care of is your credit score.

A good credit score is crucial to a successful financial future. With a positive score, you can expect to get more job opportunities, receive the best rate credit cards, or qualify for a loan. Unfortunately, people often neglect this score. 

However, the good news is that a poor credit score isn’t a permanent problem. There are effective ways that you can improve your credit score or keep it high. According to John Ulzheimer, an expert on credit ratings, a credit score of 720+ for car loans and 760+ for mortgages gives you the best interest rates.

With the right strategy, you can maintain a high credit score. Here are seven tips to help you achieve this.


Your credit score is largely dependent on your payment history. Making on-time payments can help your FICO score. In order to stay up-to-date on payments, set up reminders on your phone or laptop. You can also choose an automatic payment method. Make sure that you pay your bills on time, including utilities, cell phone bills, and rent.

What if you pay your bills on time now, but you had a late payment in the past? While missed or late payments might stay on top of your credit report for years, its impact will decrease with time. Thankfully, most of the negative items start having little impact on your credit score after a couple of years.

So if you had issues in the past, focus on making timely payments today and be patient. You will be able to achieve your desired credit score in no time. 


Many believe that paying off their debt will help their credit score. But that is not always true. At times, it might just reset the clock and ding your credit history even harder.

To understand this better, here are a few things you need to know: 

  • The recent FICO and VantageScore ignore paid debts.
  • Non-medical debts hurt the score more than medical debts.
  • Pay off recent delinquent accounts first, as these harm your score to the greatest extent. 

To improve your credit score, you can fix your unpaid collections. Nevertheless, make sure that you are careful because paying off accounts will not always improve your score. In fact, it can make you start over and cause it to take longer for the debt to be removed from the report.


Another key component of the credit score is credit utilization. It can measure the balances you owe on your credit cards relative to the limit on the card. The ratio is calculated on the overall amount.  

Your credit utilization ratio should be below 30%. This applies to all cards and the total credit utilization ratio. Strategies to improve your credit score emphasize managing the denominator and reducing the numerator.

If you need to improve your credit utilization ratio, apply the techniques below: 

  • Get a high interest-rate card with a personal loan, which has beneficial terms. If you combine the balances of multiple credit cards, it is possible to reduce the interest you owe by lowering the interest rate. Hence, you are going to pay more principal and pay off the debt quickly. If the credit card is active after you transfer the debt to a personal loan, the credit utilization ratio will come down.
  • Increase the monthly minimum amount for decreasing the credit card balance.
  • Make sure the cards are open even after you have paid them off. This will reduce the overall balance you owe. However, make sure you maintain the limit to reduce the credit utilization ratio. 
  • Ask for a credit increase on all or at least one of your cards.


It’s possible that there are errors in your credit report, so you should watch for these. There are tools available online that will find any declined payments that are not your fault.

Go through the reports and check for errors. If you find something wrong, you should fight it. Do not let wrong information be the reason you have a poor credit score. It’s an easy fix.


If you apply for a new credit card, you will activate a hard inquiry. This tends to show up on your credit report, and the credit score takes a dip. 

For instance, if there are four hard inquiries within a period of 90-days, it can lower your credit score by 50. Moreover, this can stay on your report for more than two years.

Lenders often take a step back when they notice multiple hard inquiries and start considering you a high-risk borrower. So don’t apply for multiple credit cards if you don’t need them.


Credit providers look for proof that you can manage various credit types successfully. Lenders want to know if you will be able to handle various kinds of credit products.

For example, mortgages, student loans, and auto loans are installment loans that come with a fixed payment. However, a home equity or credit card represents a recurring credit with payments that are variable. To better understand your existing loans, loan management software can help you make the most of them.

Credit card companies prefer people who have many credit accounts open. But you have to be careful about having several new accounts simultaneously. Lenders see multiple credit card applications in a negative light. 


If you currently have debt, the first thing you need to do is stop using your credit cards and formulate a budget. Start paying off the cards with the highest interest first while maintaining the minimum payment requirement on your other debts. Many people feel that they are deeply trapped by debt, but you can get out of debt by changing your financial habits.


Some people think it isn’t fair to be judged by their credit score, but it’s a way of showing lenders how good you are at paying off your debt. If you’ve never had much debt, you will not have a high score. However, that doesn’t make you irresponsible. No matter how fair or unfair your credit score is, it can have a considerable impact on your life if you don’t maintain or improve it.


Author Bio

Gabby Baglino is a digital marketing specialist for Bryt Software, with several years experience in business marketing, writing, and content creation.

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