Your FICO score is a number that would be used by the lending financial institutes as well as banks to decide your creditworthiness. This credit score helps them know if the amount that they lend to you will be returned on a timely basis. So, if your score is high, you’ll qualify for credit at a better rate of interest, and that would bring in a lot of savings to your costs.

Tips to Improve a Bad Credit Score
If your credit score is low or not where you’d want it to be, trust us, you are not alone in this. Herein, we have come with some effective ways on how to improve a bad credit score.

Clear All Your Bills on Time
Every time a lender reaches out to a credit reporting agency (CRA) to know about your score, they are primarily interested in knowing how likely you are to pay off your dues on a timely basis. This is so because your past payments are an indicator of your future performance. So, if you wish to improve your bad credit score, you should start by paying all your bills on time. When you pay your bills late, or if you settle an amount, which is less than the due amount, your credit scores are bound to dwindle. Moreover, this tip applies to all kinds of bills, such as your phone bill, rent, or any other utilities. Although this negative information stays in your credit report for seven years, its impact will lower every year you pay your dues on time.

Set Reminders for Payments
It is a good idea to either opt for automated payments or set payment reminders to ensure that you do not delay your bill payments. This keeps your credit score in check and improves a bad one.

Examine the Credit Report
Every year, you can request the CRA for a free report. Spend some time to review this report closely. Check if there are any possible errors in it. If there are any mistakes, you should get them rectified immediately. For this, you can inform the CRA and get false information removed. Fixing these errors is also an effective way for those considering how to improve a bad credit score.

Work on your Credit Utilization Ratio (CUR)
See, if possible, try to clear your bills twice a month rather than just once. It will reduce your CUR and improve the credit score.

Do not apply for a new card every few months
Yes, having multiple credit cards indeed improves the total limit for an individual, but it has a deteriorating impact on the credit score when you get many cards in a shorter span.

Try to keep unused credit accounts operational
Credit age does have an impact on the credit score. So, if you have an old credit card, and do not use it too frequently, you must not close it, as doing so may increase your CUR.