1. Manage your Credit Utilization properly. Credit Utilization is the ratio of your outstanding credit card balances to your credit card limits. It measures the amount of available credit you are using. For example, if your balance is $3,000 and your credit limit is $10,000, then your credit utilization for that credit card is 30%. Having each one of your credit cards below the 30% mark will improve your credit score.
2. What day of the month does your credit card report to the credit bureaus? The three credit bureaus are TransUnion, Equifax and Experian. Your Chase Visa may report your credit card balance and limit to the credit reporting agencies on the 15th of every month. Your Discover card could report your balance and limit on the 10th of every month. Call your credit card companies and find out what day of the month they report your information to the credit bureaus. Why do you need to know this? As mentioned above, it's important to keep your credit card balances below the 30% utilization mark. If possible, you will want to make your credit card payments before the date of when your credit card company reports your information to the credit bureaus. Let's say on the 15th of every month your Capital One card reports your balance and limit to the credit bureaus. That means on the 14th of every month you will want to do your best to make sure that credit card has a utilization rate that is lower than 30%.
3. Avoid late payments. Being late on your credit card payment can dramatically hurt your credit score. If you happen to be late making a credit card payment, call your credit card company the day you are late. Find out how long it would take for the credit card company to report your late payment to the credit reporting agencies. Some late payments are reported to the credit reporting agencies 30 days after the payment due date. Some creditors may not report late payments until they are 60 days past due. If you are able to make the payment in time before the creditor reports your late payment to the credit agencies you can avoid having a late payment tarnish your credit score.
4. Ask for credit limit increases. If you have a credit card with a $5,000 limit and a balance of $1,000, there is a possibility the credit card company will increase your limit. If that limit went to $10,000 and you still had a $1,000 balance on the card, now your credit utilization on that card is 10%, instead of it being 20% when you had a $5,000 limit. Again, the lower your credit utilization you maintain, the better your credit score will be. Not all credit cards will increase your limit when you ask but it doesn't hurt to call them up once a year and see if they are willing to. Just make sure they don't do a hard pull on your credit report if they do look into getting your limit increased. Hard pulls/inquiries on your credit score can lower your credit score.