Ways to Improve Your Credit Score

Having a good credit score is important for so many reasons. Obviously a good score will help you land a loan for a house or car or other major purchase. Did you know that many companies will check your credit score prior to hiring? And a low credit score can have a negative impact on how much your car insurance is each month. So let’s look at a few ways you can start bringing your score up, some are fast and some take time.

 

Improve Your Credit Score

First thing’s first, check your credit score. Everyone is entitled to a free credit report once a year under the Fair Credit Reporting Act. You can request a complete credit report on the government mandated site AnnualCreditReport.com. Understanding the scores is next. Most scores are between 300 and 850 and the tiers are as follows;

Excellent Credit 750+

Good Credit 700-749

Fair Credit 650-699

Poor Credit 600-649

Bad Credit 600 and below.

Now that you have your score, what do you do with it? Check it for errors, is your personal information accurate? Are all of your accounts reported? Check to see if you have any late or missing payments that are being reported. Double check to make sure that all of the accounts listed actually belong to you. Make sure that it’s current and there aren’t items on the list from decades ago that are past the statue of limitations. Take your time and really look through it.

 

Watch Credit Balances

To keep your scores high, it’s best to maintain less than a 30% balance on your credit cards. If you’re needing a quick boost on your score, pay them down and keep them down. If you have multiple credit cards, you can consolidate them and get a personal loan to help with this. One payment per month is much easier to keep track of than several. Additionally, try not to use more than one card. If you have several, pay them off and use only one to make purchases. One of the things that your score considers is how many of your cards have balances.

 

Pay Your Bills On Time

Skipping payments or making a late payment can seriously affect your credit score in a negative way. Use a calendar or text and email reminders and make sure you pay them on time. If you’re planning a major purchase like a home or a car, all of the savings that you’re sitting on won’t help you if you’re late on your credit card purchases. Getting a loan will be difficult, so pay attention and don’t miss a payment.

 

Limit Credit Applications

Lots of department stores and home supply stores offer a hefty discount on your purchase if you fill out a credit application with them. The problem is that it means they’ll be doing a hard inquiry on your credit score and this can make it drop. Not a lot, usually only 3-5 points, but if you’re on the cusp between two tiers in the credit score chart, this can make a lot of difference.

 

Keep Old Debt

While negative items are bad for your credit score, and don’t worry, they disappear after seven years, paid balances can bring it up. The longer history you have, the better your score, so leave them on there.

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