5 Helpful Steps to Improving Your Credit Score

5 Helpful Steps to Improving Your Credit Score

One thing we never were taught about growing up was how your credit works. Unfortunately, credit was something that was known nothing about until my young adult years. Having a good credit score means you’ll qualify for lower interest rates on all sorts of financial products. This will include personal loans, student loans and credit cards to mortgages and home equity lines of credit. We all are witnessing the historical rise of interest rates when it comes to homes. The money saved could be used for your savings, a vacation or to be saved for a rainy day. If you are not sure where your credit stands, you can keep up with by checking out Credit Karma. Credit Sesame is another site to get free access to your credit report also. Below are 7 ways to improve your credit score right now.

Paying Bills on Time

According to Experian, your payment history is the most influential factor for the FICO and VantageScore. If you have an established history of on-time payments, lenders will think you can handle debt. In the process, try to avoid late payments, defaults, repossessions or any collections. If you are thinking about filing for bankruptcy, do not do it because it’s a bad idea. This will show creditors that you’re not capable of paying back debt.

Always Keep Credit Utilization Rate Low

One of the things I’m always paying attention to is my credit utilization. It has been recommended to keep the utilization rate as low as 10%. The higher that ratio, the fewer points you’re going to earn in that category and your scores are absolutely going to suffer. If we are talking about the FICO score, keep it around 7% as it equated to a higher score. If you struggle with high balances and mounting interest payments on your cards, consider consolidating with a 0% introductory rate balance transfer credit card, but make sure you know when the rate will increase and by how much.

Look Into a Score Boosting Program

You may have seen a commercial online or on the TV for Experian Boost. Experian Boost and UltraFICO are programs that allow you to boost your credit profile. With Experian Boost, you connect to your online banking institute. After that, the credit bureau add telecommunications and utility payment histories to your report. With UltraFICO, it gives permission for your banking data like checking and savings account.

Only Apply For Credit You Need

When you start improving your credit, you will begin receiving offers from almost everywhere. You must remember that every time you apply for a new line of credit that’s a hard inquiry on your credit. This type of inquiry lowers your score temporarily. Applying just to see if you get approved or because you received a pre-qualified offer of credit is not a good idea. The effects of a hard credit pull on your score, according to a representative of TransUnion, can last up to 12 months. With nice weather in the air, you may want to invest in something around the house. For me, I’d love to upgrade my patio by buying some new garden furniture to make things look nice.

Always Monitor Your Credit Report

When you view your own credit, a soft inquiry is pulled, which doesn’t affect your credit the way hard inquiries do. This is something I’m doing all the time, but I’m currently using Credit Karma to keep track. You can keep track of everything and you could see if anything is wrong also. You can get a free copy of your report at annualcreditreport.com. Under normal circumstances, you would be able to get one free report from each of the three major credit reporting bureaus (Experian, TransUnion, and Equifax) per year. However, in response to COVID-19 you can access a free weekly report from any of the bureaus through December 31, 2022. If you find mistakes, you can get items removed from your credit report by disputing the information directly with the credit bureau.

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By Trav

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