Even though you may have zero debt and have never been delinquent on a bill, you could still have a low credit score or it may be lower than what you thought it should be. So, if your credit score seems to be low, the CEO of RP Funding and host of the Money Minute radio show, Robert Palmer is here with some contributing factors that you can avoid and helpful ways for you to raise your credit score.


Robert’s Response:

Credit scores are factored by Credit Monitoring Services by using a complex algorithm. Many things can impact you credit score, such as cancelling a credit card, but, generally, they look at three factors when calculating your credit score.


Factor 1: Do You Use Your Credit Cards?

The first factor they look for is that you have some open credit card accounts. They like to see that you use them on occasion, so be sure to use your credits cards. In fact, not borrowing money can hurt you. If you have zero credit, you’ll have zero credit score — which will make it very hard for you to do things in life. However, the key is to keep your credit cards at a low balance. If you carry a high balance on your credit cards, that can be as bad as being late on a payment.


Factor 2: Are You Late On Payments?

This brings us to the next factor that can severely affect credit scores; being late on a payment. We should all know that it is important to pay our bills on time. Not only do late payments show that you are an irresponsible borrower, but it will devastate you credit score and result in late fees.


Factor 3: Do You Apply For Credit Too Often?

The third factor used to calculate your credit score is how frequently you apply for new credit. When you first open a new account, they ding your credit score temporarily because they want to make sure you can handle that new obligation. Usually at about the six-month mark after opening up new credit, your credit score will start to go back up. But your credit can only take so many dings, so try not to apply for new credit too often.


How To Raise Your Credit Score:

To improve your credit score, remember to use your credit cards (but try and keep them at a zero balance), make your payments on time, and be very conscious of how frequently you apply for new credit. Follow those three steps and you will raise your credit score to a healthy level.