While paying bills on time is critical for maintaining a good credit score, it can take time to actually increase it. There is, however, a way to speed up the process.
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“Something you can do quickly is to lower your credit utilization ratio,” Creditcards.com industry analyst Ted Rossman told FOX Business’ Maria Bartiromo.
The credit utilization ratio is the credit currently in use (how much a person owes) divided by the credit limit. Ideally, an individual should look to keep his or her ratio below 30 percent, though below 10 percent is best, according to Rossman.
“What people don’t realize is that even if you pay your credit cards in full every month — and you should — you may still have a high ratio which is hurting your score,” he said.
One way to help lower this ratio is to make an extra credit card payment before the end of the month before the statement generates, he suggested. Lowering this ratio will help an individual’s credit score immediately, he added.
Another potentially helpful program, geared toward people with low credit or who have little credit history, is Experian Boost, Rossman noted. This program looks at things that don’t traditionally count as credit such as cell phone payments and utility payments to determine if these have been made on time, he said. Rossman recommended those with a credit score below 700 look at this option.
While the average credit card rate is about 17 percent, according to Rossman, delinquencies are low.
“[People] are not getting ahead though. Two-thirds of credit card debtors owe at least as much now as they have over the past decade,” he said.