About Your Credit
How to Improve Your Credit Score
Banks and Lenders alike
review your credit score to determine how they feel your future behavior
will be related to any loan products they provide to you. The higher
your credit score, the easier it is to qualify for any type of credit
from renting an apartment to credit cards, auto loans and even a job.
Many employers now look at your credit before hiring a potential
employee to determine habits and character of a potential new hire. Here
are a few tips to help boost your score:
1. Pay Your Bills On
Time - Sounds easy, right? Your payment history is the single biggest
factor in determining your credit score. If you are struggling making
your payments on time, reach out to your lender and ask about
alternative payment plans that could help you get back on track. Many
also offer an automatic bill pay option that takes the money right out
of your account on the due date.
2. Reduce Your Debt by Paying
Down Your Larger Debts First - If there is any way possible, try and
always pay more than the minimum payment amount. Start with the largest
burden on you financially and try to get that one paid off first. Once
you get that one tackled, move on to the next highest and continue that
same process. Before you know it, you will have those high credit card
balances paid.
3. Avoid New Credit - Only apply for new credit
when you absolutely need it. The best way to boost your credit score is
to keep revolving balances low and make all of those payments on time.
If you are just starting to build credit, make sure you don't open up to
many accounts to soon.
4. Report Any Errors - You should
review your credit report carefully for anything that you think could be
wrong. Contact the credit bureau that sent the report in writing to
correct any mistakes. Consumers should review their credit report at
least once per year to identify mistakes or potential fraud taking place
in your credit report.
5. Limit Your Shopping for Credit -
Inquiries in your credit profile can lower your score. When you decide
it is time to go out shopping for a car loan
or mortgage, try to limit your shopping and pulling of your credit to
within 14 days. Any pulls on your credit within that time frame has a
limited adverse effect.
6. Stability - Creditors like stability,
so they do not like it if you move around or change jobs frequently.
Have a verifiable address. They need to be able to open the phone book
and verify the information on your application.
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