4 Tips to Improve Your Credit Score

Q. What can I do in a short period of time to improve my credit score?

A. There are many factors that influence your credit score, but there is only one factor that is truly under the control of you - your Credit Utilization Rate.

Credit Utilization rate is calculated with total amount of credit used divided by total amount of credit allowed.  Here are 4 tips you can use to improve your credit score, they are all related to improving your credit utilization rate:

1. Apply for a higher credit amount: make sure to ask if the credit card company will do a hard pull to make the decision, if they do, stop immediately.  If you just had your credit card in less than 12 months, or you asked for a credit increase in less than 6 months, there is no need to try, you won't get approved again so soon.
2. Pay back your outstanding balance: if you have multiple credit cards with outstanding balances, start with the one that charges the highest interest rate.
3. Do not use credit card frequently: even you pay each credit card balance in full every month, the utilization rate's calculation will use that month's total transaction amount as the numerator, so if you want to improve your credit score, don't use your credit card too frequently.
4. Merge multiple credit cards: this applies when you have multiple credit cards from the same institution. Make sure you merge the newer card into the older card, not the other way around.  In this way, you can improve your credit history.