Just like everything in life, there is no short cut to improving your credit score. It takes time, effort, and commitment to raise the score. Fortunately for me, I’ve started building credit history when I got my first credit card during college. Ever since then, I have never carried a balance and always paid everything in full. When I purchased a brand new car 7 years ago, I took a 60-month loan, but paid it all off in less than 3 years without being late for a single payment. Whenever I made a big purchase with my Discover or Chase Mastercard, I made sure I would be able to pay everything in full so I won’t carryover any balance to the next billing cycle.  Even if I had to tap into my savings from ING Direct, I did that so I could pay off the payments. So after accounting for all these things, when I decided to purchase my home, I discovered that my credit scores were between 790-810 from the three major credit bureaus, Experian, TransUnion, and Equifax. It was nearly perfect. I believe that having an excellent score was one of the main contributing factors of how I was able to qualify for a home mortgage loan even when my debt-to-income ratio was a bit on the high side.

Six Most Important Rules To Improve Your Score

If you are fortunate enough to be blessed with good credit history with outstanding scores, you should continue to spend smart and try your best to maintain your excellent scores. One simple mistake could lower your score drastically. If you aren’t as fortunate, there are way to raise and improve your scores.  Follow these 6 rules and you’ll be on your way to credit freedom.

1. Pay your bills on time. Whatever you do, just make sure you are not late in making those payments. Even if it’s just the minimum amount, it’s vital that you pay bills on-time every time. I can’t emphasize that enough.

2. Pay down revolving credit. Revolving credit is credit that doesn’t have a fixed number of payments. These type of credit include line of credit and home equity line of credit (heloc). Since these credit don’t have any contractual fixed number of payments, any balance you carry will hurt your score. Try to pay them off, first priority.

3. If you must carry a balance, try your best to keep the balances as low as  possible. The worst thing you can do is max out to your limit. Lenders know that when consumers max out to the limit, chances of paying back the loan will be slim. Carrying a balance above 30% of the credit limit will hurt your score. Try to stay below 30% if you can. The lower the better.

4. Don’t open new credit cards to increase your credit limit. Opening new accounts when your credit history is already poor will not help your score. If anything, it’ll have a negative consequence as a result. If you must open new accounts, pay them off rapidly and on-time to re-establish your good score. Re-establishing good score will take time and does not happen overnight.

5. Stop using your credit cards. Focus on decreasing the balance. Put them away in a secure place until you have a better control of the situation. In other words, don’t use your credit cards until you balance is at most 30% of the maximum credit limit.

6. Be patient and don’t give up. Increasing your credit score will take time and effort. Don’t check your score too frequently. Once or twice a year should be the most, unless you have a delinquency in your history you’re trying to sort out. Just work hard and find smarter ways to budget your money.