Your credit score is more than just a number. It’s a reflection of your financial health and a representation of your borrowing potential. There are many factors that can cause your credit score to fall, including missed payments and high credit utilization rates.

Fortunately, a drop in your credit score doesn’t have to be permanent. Though it may take time to completely repair your credit, here are seven simple ways you can boost your score.
<h2>1. Use a Secured Credit Card</h2>
A <a href="https://www.chime.com/credit-builder/" target="_blank" rel="noopener">secured credit card</a> is a good option for those with damaged credit or no credit history. It is a bit like a credit card with training wheels to help you build up your credit score. Some secured credit cards require an initial deposit, while others require a transfer of funds instead. The initial deposit or funds transfer removes some of the credit issuer’s risk of loss. This, in turn, improves your likelihood of being approved.

You will need to make monthly <a href="https://www.inbusinessworld.com/5-things-electronic-payments-can-do-for-your-business/">payments</a> on your secured card balance, just as you would with a regular credit card. Failing to make your payments on time will result in further damage to your credit score. On the other hand, you can boost your score by consistently making timely payments on your secured card.
<h2>2. Review Your Credit Report Annually</h2>
Many borrowers don’t know they can request a <a href="https://consumer.ftc.gov/articles/free-credit-reports" target="_blank" rel="noopener">free copy</a> of their credit report every year. Each of the three credit reporting agencies must provide this copy upon request. When you review your report, check for errors, unexplained credit lines, or other possible indications of identity theft.

Identity theft can result in significant damage to your credit score, so it is important to catch it early. Identity theft may also lead to drained bank accounts and stolen tax refunds. If you suspect fraud, place a fraud alert in your credit file by contacting any of the major credit reporting bureaus. It is important to act quickly to prevent further harm to your financial standing.
<h2>3. Keep Older Credit Accounts Open</h2>
It feels good to pay off debt and close old accounts, but this may not be a wise move if you’re trying to boost your credit score. The age of your oldest credit account is another factor in determining your score. Older accounts are generally more favorable because they show a long history of monthly payments.

If you want to close some of your accounts, choose newer accounts — provided the terms are similar — and keep your old ones open. Some<a href="https://www.inbusinessworld.com/what-is-forex-mini-accounts/"> accounts</a> may be considered inactive if you don’t use them regularly. To keep older accounts active, try to use them at least once a year for small purchases. You can turn around and pay them off right away to avoid increasing your debt.
<h2>4. Pay Your Bills on Time</h2>
Your payment history is the most significant component of your credit score. To boost your credit score, make it a habit to pay your credit card bills on time every month. A single late payment may not have a notable impact on your credit score, but multiple missed or late payments will.

If you have trouble remembering when credit card payments are due, set reminders on your phone or jot the dates in your calendar. Better yet, use autopay to ensure that these bills are paid in a timely manner. A positive payment history looks great on your credit profile and will help you become a better candidate for financing.
<h2>5. Pay Down Debt</h2>
It is good to have a little debt when you’re trying to build or repair your credit. You have to establish a solid payment history, after all. But too much debt is a red flag for creditors and an indication of poor financial health. If you overextend yourself financially, your credit score and your bank account will suffer.

To give your credit score a leg up, pay down your credit cards and other sources of debt. Rate your credit cards in order of priority based on interest rates. Pay extra on cards with higher interest rates while still making the minimum payments on all other cards. Once you pay off the card with the highest interest rate, pay down the next card on your list.
<h2>6. Keep Your Credit Utilization Rate Low</h2>
Your credit utilization rate is an important metric used to determine your credit score. It refers to your total credit card limits versus your owed balances. Generally, creditors like to see credit utilization below 30%. So if you have two cards with $2,000 credit limits, keep your combined balances to $1,200 ($4,000 x .30) or less. If your usage is higher than that, it will negatively impact your credit score and your eligibility for additional lines of credit.

One way to lower your credit utilization rate is to pay down maxed-out credit cards. Aim to pay down the balances until you’re using less than 30% of your total credit limit. Your credit score will benefit even more if you can bring your credit usage down to 10% or less.
<h2>7. Avoid Too Many Hard Credit Inquiries</h2>
A credit inquiry is when a credit issuer or other authorized party accesses your credit file for various reasons. These inquiries come in two forms: soft and hard. A soft inquiry occurs when you check your own credit report, for example, or a potential employer performs a credit check. A soft inquiry will not harm your credit.

A hard inquiry, on the other hand, occurs when you apply for a loan, credit card, or other credit line. It allows a business or individual to determine whether it is too risky to extend credit to you. These inquiries can negatively impact your credit, although a single hard inquiry won’t likely reduce your score by more than a few points. Several hard inquiries in a single year, however, can cause a meaningful drop — a concern if your score is already low. Whenever possible, avoid multiple hard inquiries on your credit report over a short period.

Your credit score is like a snapshot of your financial health at a given point in time. If yours looks like it’s in need of life support, try not to panic. You can nurse your beleaguered credit score back to health by following these seven simple tips.

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