Having a good credit score is essential for accessing financial services, such as making large purchases, getting approved for loans or mortgages, and even renting an apartment. 

Unfortunately, the process of building a good credit score can be daunting, especially if you’ve had trouble in the past. If this sounds like you, don’t worry – there are plenty of ways to start rebuilding your credit score today.

Therefore, let’s look at the six tips that can help you build your credit score.

Apply for a secured credit card

A secured card requires an upfront deposit, which then becomes the credit limit for the account holder. This form of lending is less risky for lenders than unsecured cards since it eliminates the risk of you not paying back the loaned money.

Additionally, secured cards can help you rebuild your credit score. When applying for a card, make sure it is reported to the three major credit bureaus: Experian, TransUnion, and Equifax. These bureaus are responsible for the calculation of your credit score.

Better money management

Maintaining a good credit score requires discipline when managing your money. Steer clear of late payments and make sure you always pay your bills on time. This will help you become more diligent with money management and cultivate better financial habits in the process. 

However, if you need experts to help, you might want to consider enrolling in a debt management program. Or, to get your credit history back on track, you can also set up automatic payments from your bank account to ensure that you don’t miss payments. Your financial advisers will also help you review your credit report and will provide personalized advice on how to improve it.

Increase your credit limit

Increasing your credit limit will help increase your credit score. To do this, you can contact the company that issued you a card and ask if they are willing to increase the limit. Companies prefer customers who use their credit cards responsibly, so when considering an increase in limits, they look at past payment history and financial stability.

Therefore, try to pay your balance in full each month to show your creditors that you are responsible for credit. You can also ask your creditor to lower the annual fee or interest rate if you have a good credit score.

Become an authorized user

Another option is to become an authorized user on someone else’s credit card. The primary account holder agrees to allow the authorized user to use their card, and all payments made by the authorized user are reported in the primary account holder’s credit report. This can help the authorized user develop or rebuild their credit score since all payments are reported to the major bureaus.

Additionally, if you are an authorized user, try to make sure that the primary account holder pays all bills on time and in full. Late payments will harm your credit score.

On the other hand, if you are the primary cardholder and want to help others build their credit score, you can add an authorized user to your card.

Keep your balances low 

Maxing out your credit cards can be damaging to your credit score. To ensure that this doesn’t happen, keep your balance at 30% of the credit limit or lower. For example, if your credit limit is $1000, you should aim to keep your balance at or below $300.

Also, instead of closing a credit card, consider keeping it open and inactive. This will show creditors that you can manage your accounts responsibly and prevent this from affecting your overall credit score.

Checking your credit report

Finally, reviewing your credit report regularly is a great way to monitor progress. Checking yearly can also help you spot any errors and alert you to any suspicious activity that could be impacting your score. Furthermore, if you see any discrepancies, dispute them with the credit bureau to ensure that your report is accurate.

For instance, if you find an account that belongs to someone else, contact the credit bureau immediately and dispute it. You can also contact the lender to investigate whether there was any mix-up in information or fraud.

Building credit is a process that requires discipline and dedication. From maintaining good money management habits to increasing your credit limit, there are several ways you can build or rebuild your credit score. Becoming an authorized user on someone else’s card, keeping balances low, and checking your credit report regularly may also help improve your score over time.

However, if you find yourself in need of additional assistance with building or rebuilding your credit score, consider speaking with financial experts who specialize in this area as they will be able to provide advice tailored specifically for you.