This is often easier said then done, but when it comes to your credit score, the importance of paying your bills on time cannot be overstated. Your payment history is one of the largest contributing factors to your score and having a late or missed payment can dock you a significant number of points. Setting yourself up for automatic payments for your rent or utility bills might help you stick to a better payment schedule, or you can also set up alerts when it comes time to pay your credit card bill.
There is such a thing as good debt. When you use your credit card and pay back your bill on time, you are creating a consistent payment history that bumps up your credit score and tells lenders you are reliable. That being said, most sources recommend keeping your credit utilization "at or below 30 percent" because "having available credit indicated that you're only using the credit you need, which may be a positive sign for lenders. If you struggle to reduce your spending and stay under the 30% benchmark, you could consider asking your credit card company to increase your credit limit. An increase limit will lower your overall credit utilization and improve your score.
Remember when we mentioned "good debt?" This is especially true when you consider solutions like secured credit cards or a secured personal loan. If you don't have a lot of credit history built up yet, secured credit cards are the perfect place to start. They help create positive credit history because they require that you make a deposit up front that matches your credit limit. Then, you can use your card as usual, and make payments just like any other credit card. Typically, secured cards look no different than an unsecured card so you will be the only one who knows it is secured.
While rebuilding your credit takes time, these steps will help you on your way to a higher credit score and a healthier financial future! If you are interested in how Blue Flame can help you improve your credit score with a loan or credit card, talk to our team today!
