The personal credit score is an essential part of your financial life. Whether it is a low mortgage interest rate, good reward credits, getting a new cell phone, or applying for car insurance, you will need a good credit score. But building a great credit score is easier said than done.

Achieving a good credit score can take gradual steps and good financial behavior that spans over the years. But that is not always the case. To improve your credit score, you need to understand the factors that are affecting your scores first. This way, you can focus on what matters because some elements are typically more critical than others. Either way, you can take these steps to give a boost to your credit score in the short-term:

  • Minimize Your Credit Utilization Ratio

Credit utilization is one of the most significant factors when it comes to your credit score. Your credit utilization ratio metrics make up 30% of your credit score. And it refers to how much credit you use divided by the overall amount of credit you can access.

For instance, if you billed $100 from your credit cards and your overall credit limit is at $500, your credit utilization ratio is 20%. If you want to have a favorable standing with the credit bureaus, it is generally recommended that you use up to 30% of your total credit card limit as a rule of thumb. But experts suggest having that utilization ratio kept under 10% will boost your credit score. Here are tips to follow:

  • Split your bills over multiple credit cards.
  • Stick to charging only the essential purchases such as groceries and gas.
  • Be the authorized user on a credit card

That applies if you have a family member with a higher credit score than yours. In this case, have them add you to their credit card as the authorized user. By doing so, you will positively affect your scores in the event your card has a lower credit utilization ratio and a long history of on-time payments.

  • Prioritize Paying Off Cards With The Highest Balances

The first thing that springs to your mind when it comes to boosting your credit score is to limit future spending. However, we often forget one key element, which is paying off your credit cards. If you have multiple cards with balances, prioritize paying off the cards with the highest balance. By doing so, you will reduce the credit utilization ratio.

Furthermore, doing away with your outstanding debt improves your debt-to-income ratio and gives you a favorable standing with lenders. Not all the credit bureaus use it, but quite a number consider it as a factor.

  • Pay Your Bills On Time

When creditors look at your credit report, they request your credit score because they want to establish how reliable you are in your on-time bill payments. Besides, your payment history is considered the most important metric on your credit score, with a 35% weighting. So, it is imperative that you make on-time payments. And it doesn’t have to be the full amount. You can make the minimum payments to keep your account (and the credit score) in good standing.

Your Credit Counts

If your credit score is not where you desire it to be, you aren’t alone. Use software like Credit Karma or Credit Sense to monitor your credit balances and activity. Steps to boost your scores are gradual and can span over the years. However, if you can take the above steps and consider other factors dragging your scores down, your credit score will go up.

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