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As summer approaches, many people are looking to make up for what they missed last year. The credit score of Americans has seen a general upward trend, but if your own score hasn't done the same yet, it can put a real damper on your summertime plans. Luckily, there are several easy ways to improve your credit score — and fast!

Pay bills in full and on time

One of the most important factors in improving a credit score is how you handle your bills. Be sure to pay the entire amount owed by the due date. This may seem simple but it is extremely impactful on your credit score. Payment history is usually a good indicator of how reliable someone is and how likely they are to be trusted with money, so it is one of the biggest factors on a credit score.

Maintaining a filing system for bills is an effective method of ensuring regular payments. Whether you get paper or digital bills, staying organized can make a huge difference. Many organizations offer an automatic payment option that is convenient for those who are busy or forgetful.

Diversify your credit

Keep a close eye on the different kinds of credit that you are using to build your score. You may have heard this methodology being called credit mix.

While it is important to diversify your credit, it is only worth about 10% of your credit score. This may not sound like very much, but diversifying the types of borrowing you do can open up new opportunities in the future. There are three main types of credit, each with their own unique purpose:

  • Installment credit — definite amount of money borrowed over a set period of time.
    • Ex: car loans.
  • Revolving credit — no definite amount of payments.
    • Ex: credit cards.
  • Open credit — pre-approved loan between a lender (bank) and a borrower.
    • Ex: home equity loan.

Pay credit card bills weekly if possible

Aside from your non-credit related bills, paying your credit card bills on time factors heavily into your credit score. If you carry your credit card debt with you from month to month, paying a small sum more often can increase your score. The results of paying smaller amounts more frequently can vary from person to person, depending on their respective financial situations.

This method could also help decrease interest and late fees paid, because you will almost certainly be meeting your minimum required payment. Not only will you be boosting your credit score, but you will save money, too.

Keep in mind that there are five factors that impact your credit score, but some of them are only impactful over a longer period of time. The key information used to determine a credit score is:

  • Payment history.
  • Outstanding balances.
  • Length of credit history.
  • Applications for new credit accounts.
  • Types of credit accounts.

To learn more about how to improve your credit score as it relates to your personal circumstances, reach out to The Federal Savings Bank.