Final answer:
Ralph can improve his FICO score by paying bills on time, reducing credit utilization, building a positive credit history, diversifying credit mix, and checking his credit report regularly.
Step-by-step explanation:
Ralph can take several steps to improve his FICO score:
- Pay bills on time: Making timely payments is crucial in improving the credit score. Ralph should ensure that all his bills, including credit card bills, loans, and utility bills, are paid on or before the due date.
- Reduce credit utilization: Ralph should aim to use only a small portion of his available credit. Using a high percentage of the available credit can negatively impact the FICO score. Keeping credit utilization below 30% is recommended.
- Build a positive credit history: Ralph can establish a positive credit history by consistently using credit responsibly. This includes keeping credit accounts open and active, making regular payments, and avoiding applying for excessive credit.
- Diversify credit mix: Having a mix of different types of credit, such as credit cards, loans, and mortgages, can help improve Ralph's credit score. It demonstrates the ability to manage different types of debt responsibly.
- Check credit report regularly: Ralph should periodically review his credit report to identify any errors or discrepancies that could be negatively affecting his credit score. If he finds any inaccuracies, he should dispute them with the credit reporting agency.