2 Practices to Avoid If You Want to Improve Your Credit Scores

Even if there are different opinions about how one can improve their credit score, the truth is that certain ideas if implemented almost always end up causing more harm than otherwise.

It’s best to understand that there are a number of models a lender can use but what always works best is to identify behavior rather than look at the numbers that will improve your scores.

Among a number of good behaviors, paying your bills on time, creating a long history of good credit use, making very little use of your credit line and applying for new credit lines conservatively might work.

However, here are 2 practices that you should consciously avoid if you want to improve your credit scores:

#1: Close old accounts

Advice in the form of closing old accounts that you don’t use anymore is probably the worst that you can take. The reason for this is keeping them open ensures that you raise credit utilization, which is the ratio between how much money you use and how you have left. This is the second biggest factor after payment history that determines your credit score.

Another advantage in keeping it open means to have extra credit just in case you need to spend more.

#2: Carry a balance

Since credit cards give one the option to buy something now but pay for it later, this advantage can be misused. A common misconception is that if you carry a balance, this will help your credit scores.

Don’t make the mistake of carrying a balance when you have the money to pay it down. Most often, this ends up with being reported as high utilization. Worse still, carrying a balance means paying interest, and that’s something that works against you while not getting you the high credit score you want.