It is not easy at all to significantly improve your credit score but with a little patience and a lot of perseverance, you may be able to improve your score drastically. Paying off credit cards will not hurt your credit; on the contrary, it will improve as long as you don’t close the accounts.
For those of you who are frustrated with the mere mention of their credit score, even if you increase your credit by just 100 points, that can help you save thousands in interest charges on future loans of virtually any kind.
Does Closing Credit Cards Hurt Your Score?
Although you may hear a so-called expert every now and then talking about how you really can cancel a credit card without having it affect your score, it is simply not true unless you have had excellent credit history for many years. This is because even if you have a good credit history with a particular account, that information will no longer reflect on your score which means your score will go down slightly or substantially, depending on many factors.
Many people simply give up after a while when their credit suffers due to not having enough money to pay their bills but if you can gather yourself for a moment and keep your head screwed on right no matter how bad you think your finances are, here’s what you can do to improve your credit over time:
1. Start paying off one credit card at a time until the balance reaches under $25.00. Start with the one with the lowest (not the highest) balance. When you are done paying it you will get an emotional boost that will definitely help you conquer your remaining cards. The closer to zero, the better. Then, immediately set that card on an automatic payment scheduled through your bank and monitor your progress.
2. While you are paying off your first credit card, try your best to pay the minimum balance on the other credit cards. I know this is easier said than done, but if you can swing it or come close to making it happen regularly, you will be one step closer to improving your credit score.
3. Try your best to automate your bill payments. If you can’t automate all of them because there is not enough income, automate at least one or two of them. Once your credit cards are all paid down you will find yourself in a great position to be able to pay all of your bills automatically.
4. Keep your debt utilization down. Once you have paid off your credit cards (this can take one to two years on average) keep the expenditures on your cards to no more than 30% of the available credit on each individual credit card. A technique many use once they pay off their cards is to use one credit card for everyday expenses (knowing they will be paid at the end of the month) and another card for emergencies only, like front row seats to that awesome “Prince” concert coming up!
5. Request an increase on your credit lines. This works well after you have paid down the debt on your credit cards and have maintained a low balance for a while. This will ensure you stay as close to under that 30% of your available balances on each card and will help improve your score.