Do pay your bills on time.
What lenders care about, above all else, is the likelihood that you’ll pay back your debts. Doing so on time, every time, proves that you’re reliable and should boost your overall credit health.
That’s why it’s important to make on-time payments on all your accounts. That includes not only your credit card, but also your rent, utilities and even your cellphone.
Do pay down your debt.
Your credit utilization ratio compares the amount of debt you owe to the amount of credit you have at your disposal. Lenders want to make sure you’re not borrowing more than you can afford to pay back.
Most experts recommend keeping your overall credit card utilization below 30 percent. The easiest way to stay below that number is to pay off your credit card balances in full each month. A lower credit utilization ratio suggests that you can use credit responsibly, so it may be correlated with higher credit scores and better overall credit health.
Do diversify your credit mix.
Your credit mix refers to the various types of accounts included in your credit reports.
While it probably won’t make or break your credit scores, lenders typically like to see a mix of revolving credit accounts like credit cards and installment loans, such as mortgages, auto loans and student loans.
Don’t open too many new credit cards at the same time. Be careful not to open too many credit cards within a short time period. Every time you apply for a credit card or loan, it generates what’s known as a hard inquiry, which stays on your credit reports for about two years and may have a small negative effect on your credit scores.
Too many hard inquires in a short period of time may set off a red flag for lenders, as it suggests you may be scrambling for cash or getting ready to add on a ton of debt.
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