Undoubtedly, your credit score is an important financial factor of your life. 

Credit score refers to a three-digit number lenders use to help them decide how likely it is they will be repaid on time if they lend if they grant you a credit card or loan. The higher your credit score is, the more likely it is for you to be granted with credit cards or load on less demanding terms which saves your money. 

If your credit history is not much impressive, you do not have to worry. Now is the time to fix it before it gets worse. The faster you address the issue, the faster your credit score goes up. You can increase your credit score by employing several ways. There are 5 amazing tips to build credit score which are discussed in detail in below.

1. Paying Your Bills On Time

One of the major factors lenders deeply look into is your consistency to pay bills. It is on the basis of bills payments that lenders predict your future performance before they issue you any loans or credit cards. 

You can positively influence this credit scoring by paying your bills on time every month. It should also be noticed that paying late and settling an account for less will leave a bad impression on your credit score history. 

By paying bills, we mean not only credit card or loans but other bills such as auto loans or student loans, rent, utilities, phone bills etc. If you are not good at remembering things, you can take help from tools like automatic payments or calendar reminders.

2. Getting Credit for Making Utility and Cell Phone Payments On Time

If you are regularly paying your utility and cell phone payments on time, there is a way for you to improve your credit score by factoring in those payments through a new, free product called Experian Boost.  

This allows consumers to connect to their bank accounts to identify utility and telecom payment history. This is an effective way to boost your credit score.

3. Paying Off Debts and Keeping Balances Low On Credit Card

The credit utilization is yet another important number in credit score calculations. It is calculated by adding all your credit card balances at any given time and dividing that amount by your credit card limit. 

To know about your average credit utilization ratio, look at all your credit card statements from the last 12 months and add balances of each month across all your cards and divide by 12. That’s it.

4. Applying for and Opening for A New Credit Account Only as Needed

Many people are under the illusion that opening new accounts will give them a better credit mix when in reality it does little to no to improve your credit score. Unnecessary credit can harm your credit score in many ways. It can make hard inquiries on your credit report or tempt you to overspend and accumulate debt.

5. Do Not Close Unused Credit Cards

You will be surprised to know that keeping your unused credit cards open (as long as they are not costing you any money in annual fees) is a smart way to stabilize your credit card score because closing an account can increase your average credit utilization ratio. 

If these methods helped you to understand a better credit score building strategy, we would love to hear your reviews!