credit score ficoTips to improve it and how long it will take.

Roughly half of millennials have bad credit. Consumer credit reporting agency TransUnion says that 43% of borrowers in the 18-36 age bracket have credit scores under 600. For a generation crushed by student debt, that isn’t surprising.1 A credit rating is a snapshot of your borrowing history. Just like a digital image, you can edit and enhance it to make it look better. Here are a few ideas to improve your credit score:

  1. Make payments in full and on time. Financially, this can be a challenge—but a mobile app or reminder system can at least help you meet deadlines. Each rent, loan, credit card, or utilities payment you miss is recorded by credit bureaus.
  2. Keep monthly account balances as low as you can manage. The further your account balances are from account limits, the better your credit picture looks. See if you can keep your balances at 30% of limits or less.
  3. Crop your credit picture. Pay off and close out accounts or loans with small balances or spotty payment histories. As NerdWallet notes, reducing a few maxed-out balances to zero may raise a credit score by nearly 100 points in less than a month.2
  4. Ask for a limit increase. Can’t reduce a card balance? Call the card issuer and ask to lift the limit. This will cut your credit utilization rate for that card. In a recent Experian survey, a third of millennials didn’t know the limits on their credit cards, and just half knew the interest rates on them. Look at the big picture and the details of your borrowing with an eye toward constant improvement.3

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