Does Your Credit Score Improve Over Time?

Paying your bills on time is one way to improve your credit score.

Paying your bills on time is one way to improve your credit score.

When it comes to your credit score, just think of your favorite sports team playing in a big game. You want a high score for certain victory. The higher your credit score is, the better off you’ll be when it comes time to buying a house or getting a loan. Fortunately, your credit score isn’t permanently in the record books, so if it’s a little on the low side, it can improve over time. There are several things you can do to make it happen.

Fix It First

Before you can begin to improve your credit score, you need to know what’s happening with it. Review your credit report and make sure that all the debts are actually yours. After all, mistakes can happen. There also shouldn’t be anything older than seven years on there. If you had a few late pays in the past, they should be off your report after seven years. You might also discover debts you weren’t even aware of. If so, research and resolve any outstanding issues.

Not So Fashionably Late

Showing up fashionably late to your social events is one way to make an entrance, but, unfortunately, paying your bills late will only garner you some unwanted attention. According to an MSN Money article by financial columnist Liz Pulliam West, a late or missed payment may reduce a 700-plus credit score by 100 points or more. In other words, find a way to pay your bills on time. Sit down and organize a payment schedule and set up reminders on your mobile phone. Consider having some payments automatically withdrawn to ensure consistent payment punctuality. If you usually pay your bills on time but may have missed one, call your creditor and see if they can forgive it just this one time. It never hurts to ask.

Balancing Act

If your cards are maxed out or fast approaching that mark, get them paid down. If you owe almost as much as your limit allows, it can have a detrimental effect on your credit score. According to an article by Jason R. Rich for "Entrepreneur," it’s ideal to maintain a balance that is less than 35 percent of your total limit. For example, if you have a credit card with a $5,000 limit, you should never carry a balance exceeding $1,750. When reviewing your credit report, ensure that creditors have your limits and balances listed accurately.

Just Say No

No matter how tempting it may be to open up that department store credit card just so you can save 15 percent on your purchase, you have to be strong and just say no to new credit. Reduce and manage your existing credit first. Applying for new credit cards or loans will reflect negatively on your credit report, not to mention you will only be adding to your debt. On a side note, if you have to apply for credit to make those department store purchases, you should probably reconsider whether you really need them.

About the Author

Based in South Florida, Leann Harms has been writing since 2008. Her design, technology, business and entertainment articles have appeared in "Design Trade" magazine and Web sites including eHow. Harms has a Bachelor of Arts in English from Florida Atlantic University.

Photo Credits

  • Jupiterimages/Comstock/Getty Images