Stay on Top of Your Credit Scores – Look for Ways to Improve if Needed
Your credit score dictates everything from credit card approval to mortgage interest rates. You can’t get away from your score, so take it seriously. Know your score, and know how to monitor it. Stay financially fit!
Clean Up Your Credit Report
To get a idea of exactly how to improve your credit score, you need to know if there are any surprise marks on your record. Just because you do everything right with your credit doesn’t mean everyone else will. Errors can happen or some bill you were unaware of can appear on your credit report leading to a drop in your credit score. Checking your credit report throughout the year lets you detect these mistakes sooner so you can correct them and maintain a good credit score.
First, check your credit report. Go to AnnualCreditReport.com and request a free credit report from each of the big three credit reporting companies: TransUnion, Experian and Equifax.
With your report in-hand, examine everything. Focus on any accounts that show late payments or unpaid bills. If that information is inaccurate, the report should tell you where to send a dispute. Do it right away.
Pay Down Your Balances
FICO, the company that calculates one of the most widely used credit scores, notes 30 percent of your score is based on the amount you owe.
If you owe more than that amount, paying down your balances is a quick way to boost your score. Live lean for a few months, hold a garage sale or pick up a temporary second job to find the cash needed to drop your credit card balances.
Loan balances and lines of credit also impact your level of debt (again, 30 percent of your credit score). Having too much debt can cost credit score points and make it difficult to afford your monthly payments. The lower your debt, the easier it will be to maintain a good credit score.
Pay Your Bills on Time
Make sure to pay all your bills on time, not just your credit cards and loans. A late payment will stay on your credit score for 7 years, so punctual payments are an important part of how to improve your credit score. While certain bills don’t get reported to the credit bureaus when you pay on time, they could end up on your credit report if you fall behind. Paying your bills on time is an excellent way to maintain a good credit score. If you’ve had difficulties paying your bills on time, debt consolidation may be a viable solution to make your debt payments easier.
Remember, getting and keeping a good credit score is important in renting an apartment, buying a home, and most other finance-based ventures. Stay on top of it for your own personal financial fitness.
