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Boost Your Credit Score in 2016
By Craig Buchan
Part 1 of 3
I focus on cutting debt, building savings, and banks behaving badly.
Have you resolved to improve your credit score in 2016? We might dislike
FICO, but the financial system still largely depends on upon those three
digits. If your goal is a higher credit score, here are five tips to help you get
there.
Tip #1:
Bring, and keep, your open accounts current.
The most
important part of your FICO score is a history of on-time payments. If an
account becomes 30 days past due, you can lose a lot of points. It is much
more important to bring and keep open accounts current than to handle old
collection items of closed accounts.
Tip #2:
Reduce your credit card utilization.
Utilization is defined as the
percentage of your available credit that you are using. To calculate your
utilization, divide your statement balances by your credit limits. If you have
$10,000 of available credit and have a $1,000 balance, your utilization rate
is 10%. According to data from
Experian Decision Analytics ,people with the
best credit scores (above 780) have a utilization rate of 5.6%.
How are you managing your accounts? What is your utilization rate?
Part 2 will continue with tips to boost your credit score.