The average credit score for adults in the United States is around 695. If your credit score is close to that number, congratulations! It means you’re handling your credit decently well.
That doesn’t mean there’s no room for improvement. In fact, most people can always increase their scores by at least a few points each year with a bit of determination.
Unfortunately, some acts and issues can cause your score to drop. Here are a few common credit score mistakes to avoid so you can get your score as high as possible.
1. Thinking There’s Nothing You Can Do
For the many people with low credit scores, it’s easy to feel like there’s nothing you can do to improve. When you’re working on a tight budget, there isn’t much left at the end of the month to pay down existing debts.
That doesn’t mean you have to accept a bad credit score. You just have to be selective about the steps you take to improve your score.
Start by paying down what you can each month. Even paying an extra $10 on your credit card will help chip away at the balance. Get in the habit of paying bills on time every time and, if you can, avoid making additional charges on your credit card.
When you stop adding to the balance, you’ll be able to pay things off more quickly.
2. Not Looking at Refinancing Options
Believe it or not, you can refinance your credit card debt to secure a better interest rate. This makes it easier for you to go from a low credit score to a high credit score more quickly.
The best thing you can do is shop around. Look for personal loans with repayment terms that you can afford and use those loans to pay the cards off in full.
3. Not Using Your Credit at All
If the thought of going into debt scares you, you’re not alone. In fact, many people end up not using their credit cards at all or canceling their accounts altogether.
Unfortunately, this can hurt your credit score. Using credit cards, even if you pay them off immediately, shows that you’re responsible with your credit. Over time, it will help you keep your score high.
Keeping those credit accounts open also helps increase and improve your score. The more available credit you have, the better your score will be. Look here to see how to use your credit and increase your income effectively.
Avoid These Credit Score Mistakes
Improving your credit score takes time and dedication. However, that doesn’t mean it’s impossible. As long as you avoid making these credit score mistakes, you’ll be on the right track.
Keep in mind that you’ll still need to work to keep your high credit score. Stay on top of your bills, pay your cards off in full every month, and only borrow the money you need from lenders.
Keeping your finances in good shape can be tough. Check out our latest posts for more tips and tricks to help you get the most out of your budget.