Have you been laid off? Do you have to pay large medical bills for a family member? Are you struggling to make both ends meet?

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Regardless of the personal challenges you are facing, the algorithm behind your credit score is merciless and will not hold back if you are late with payments. Having a poor credit score then makes it harder to get approval for a credit card application and you are left behind with paying off your loans with higher interest rates.

Another problem with having a low credit score is that you can become financially desperate. It doesn’t matter how low your credit score goes, you are going to continually receive so-called “pre-approved offers for credit” from companies like Credit 9, Americor Funding, and Simple Path Financial Many of these companies are known for peddling low-interest rate offers that don’t always work out as planned. The lower your credit score, the more likely you are to fall for a “too good to be true” offer.

Banks Dont Want You To Raise Your Credit Score — Banks Don’t Want You To Raise Your Credit Score

Tactics to Improve Your Credit Score

Fortunately, it is possible to fix a poor credit score. By adopting the following strategies, you can improve your credit score in a short time.

1. Become More Frequent with Payments

Go for micropayments—making small payments—throughout the month. This way, you will be able to keep track of your credit card balances. Another smart tip is to consider your credit card as a debit card .i.e. pay online as soon as possible. When multiple payments are maintained throughout the month, it will have a positive impact via credit utilization, thereby boosting your credit score. When credit utilization is kept to a minimum rather than having it pile up for the payment due date, it provides an instant effect.

2. Don’t Close Unused Credit Cards

If unused credit cards don’t cost money in terms of annual charges, it is a good idea to keep them open. Your credit utilization ratio increases when an account gets closed. Keep in mind that if you have fewer open accounts, but owe the same amount, then your credit score takes a hit.

3. Pay Bills on Time at Any Cost

One of the first things that lenders study about your profile is how punctual you have been with your bill payments. If you have made timely payments in the past, it can bode well as an indicator of your future performance.

Paying all the bills on time can directly influence the factors that improve your credit score. Bills here don’t include loans and credit card bills alone. They also include phone bills, utilities, and rent payments as well. Calendar reminders and automatic payments are some helpful tools that can make sure that you pay on time on a monthly basis. In case you are finding it difficult to pay back, ask someone from your friends or family to lend you some cash.

4. Keep Old Debt on the Report

After you have paid off your auto loan or student debt, you may want to remove it from your credit report. However, if your payments were complete and regular, then you can leverage those records to strengthen your credit score.

Experts state that creditors often look for an account that has a solid and long track record of debt repayments. On the other hand, bad debt will be automatically removed with the passage of time. On average, late payments, which include repossessions, collections, and foreclosures, can remain on your report for seven years while bankruptcies go away after 10 years.

5. Apply Carefully

A hard inquiry is called for your report as soon as you apply for new credit. It can drop your credit score for some time. At the most, this dip can last for 12 months, whereas the inquiry itself can remain on the report for 24 months.

Before applying for a new line of credit, you need patience—lots of it. Make sure you study the factors that increase the chances of approval so that you know what steps you can take to appear as a good candidate.

Also, don’t apply for multiple credit cards before you take out a substantial loan like a mortgage or within a short period. If you are opting for an auto loan, personal loan, or mortgage, make rate comparisons within a brief period so hard inquires can be kept at a minimum.

When similar loan applications occur during a short time frame, they are considered as a single hard inquiry. FICO states that this span can vary from 14 to 45 days.

6. Track Progress with Credit Monitoring

You can easily see the changes in your credit score with the help of credit monitoring services. Most of these services don’t cost a dime and can look for updates in your report, such as when you open a new account or you have paid off a loan. In many cases, they also lend you access to check your credit score from TransUnion, Experian, and Equifax.

See If You Qualify for Credit Card Relief

See how much you can save every month — plus get an estimate of time savings and total savings — with your very own personalized plan.

Moreover, these services can help you to avoid fraud and identity theft. For instance, they can notify you if a new credit account gets linked to your credit file, so you can call your credit card company and report before it is too late.

7. Fatten Up Your Thin Credit File – Your Credit Score Depends On It

If you don’t have much credit history, then your credit file is thin. Around 62 million Americans suffer from this dilemma. Fortunately, you can utilize a number of strategies to earn a respectable credit score and fatten up your thin credit file.

For example, you can use the Experian Boost. It is a program that gathers your financial information that is generally not part of the credit report, such as utility payments and banking history. This information is then added to the Experian FICO credit score. It is ideal for people with limited or no credit, but have a positive history when it comes to paying bills.

Another option is to go for UltraFICO. It is a free program that builds your FICO score by using your banking history. Factors that can help you include timely bill payments, maintaining a bank account, and having a savings cushion.

If you are a renter, then you have another option. Those with monthly rents can adopt multiple services through which they can make on-time payments. Some of these include RentTrack and RentKharma.