There are 3 simple ways to improve your credit score:
- Pay your debts on time. You want to make sure the creditor receives your payment on, or before, the due date.
- Have at least 3 open tradelines; meaning at least 3 companies that show up on your credit report. For instance, 2 credit cards and 1 car loan.
- Don’t max out your credit limit. In fact, if you can try to keep your unpaid credit card debt to less than 30% of the max credit limit, you should be on your way to a better credit score.
If you plan on paying off credit card debt in order to improve your credit score, do so at least 45 days prior to applying for a loan so that the credit reporting agencies have time to update the new balances.
If you don’t have at least 45 days, you may be able to send the new balance information to the bureaus directly to have them update your balances faster.