4 Tips to Maintain a Healthy Credit Score
4 Tips to Maintain a Healthy Credit Score
Trying to improve your credit score is tricky. There are a few tips that may help positively affect your credit. Some may require resources, such as achieving credit card debt payoff, while others require work, such as searching for and reporting errors on your credit report. It can be a challenge, but it is possible to improve your credit score if you learn the right methods.

Applying for a car or home loan can be challenging with a lower credit score. Meanwhile, a higher credit score could help you secure more favorable loan terms. There are plenty of ways to impact your credit score. Some are relatively straightforward, while others might require resources you may or may not have. For example, while you get help with credit card debt, you can still look for credit report errors. If you aren’t happy with your credit score and want to take steps to move it in the right direction, keep these four tips in mind. Keep in mind that there are no guarantees, but good financial habits might have an impact in the long run.

Check Your Credit Report for Errors

One of the easiest, quickest ways you may be able to impact your credit score is by looking for errors on your credit report. These errors can be negative factors for your credit score. They could come from someone with the same name as you, a misspelled address, or a variety of other human or system errors. However they ended up on your report, these errors could be holding your credit score back, and it’s on you to read your report and catch them. You will want to download your credit report and dispute any errors with the credit bureaus. You can also file a dispute with the lender who supplied the information. Although it requires work on your part, this diligence could pay off in the long run.

Reduce Your Credit Card Utilization Ratio

Credit card utilization ratio refers to how much of your credit limit you use across all your open credit card account. Generally, you don’t want use more than 30% of your overall limit. So, if your credit limit is $1,000, aim to stay at $300 or below. Achieving credit card debt payoff can essentially eliminate your utilization ratio, which is a highly positive factor. While credit card debt payoff rarely happens overnight, you can take steps to reduce your utilization ratio by paying off your balance as much as you can each month without adding more to the balance. Set a goal, and with discipline, you can make real progress.

Become an Authorized User On a Credit Card

This tip mostly applies if you have a short or non-existent credit history. While it’s almost always better to be a primary credit card user, being an authorized user on a family member’s or friend’s card might help your credit score. Mostly, it helps establish a positive credit history. However, you and the primary user must be on the same page financially, as your spending habits can affect their credit score and vice-versa. While mostly applicable to younger borrowers, it might be an option worth considering in some cases.

Pay Off Any Delinquent Bills or Accounts

If you’re delinquent on a bill and it gets sent to collections, it can significantly hurt your credit score. Lenders need to know you can be trusted to pay your bills, which is why this is heavily weighted in your overall credit score. You should be able to view any delinquent accounts on your credit report but if you ever receive a call from a collections agency or you’ve been warned that a bill is way overdue, prioritize paying it in full as soon as you can. Moving forward, be sure to pay your bills on time and stay on top of your accounts.

About Tally

Tally wants to help you worry less about credit card debt. With Tally’s help, you could achieve credit card debt payoff faster, and the service makes the entire process as easy as possible. Through a Tally line of credit, you can pay off your credit card balances and then pay back Tally with one simple payment. The Tally app offers other resources, including a credit card interest calculator, so you can discover the true cost of your credit card debt. Plus, learn more about credit cards, budgeting, and more tips through the Tally blog. Credit card debt can feel insurmountable, but Tally is here to help. Check your eligibility today!

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†To get the benefits of a Tally line of credit, you must qualify for and accept a Tally line of credit. Based on your credit history, the APR (which is the same as your interest rate) will be between 7.90% - 29.99% per year. The APR will vary with the market based on the Prime Rate. Annual fees range from $0 - $300.