Credit scores are a measure of one’s creditworthiness and ability to be trusted with borrowed money. These scores can affect many aspects of your life, from getting loans or renting an apartment to the insurance rates you’ll pay on your car or home. In order to help keep these impacts as low as possible, it is important that you maintain a good credit score. Consider these five tips to help you in reaching your financial goals.
Tips To Help You Improve Your Credit Score
1. Pay Your Bills On Time
Late payments can be damaging to one’s credit score since they show that the person may not meet their financial obligations in a timely manner as outlined by lenders or creditors. This could mean higher interest rates when borrowing money from these institutions later down the line. If you are having trouble paying your financial obligations on time, it might be time to create a budget or sit down with a financial advisor who can help you prioritize how you allocate your income.
2. Keep Your Credit Card Balances Low
Of course, the best option is to pay your credit cards off fully each month. But whether that is realistic for you right now or not, keeping your credit card balances low can help keep your credit score healthy. Keeping the balance on your individual credit card accounts at or below 30% of their total limit will help you maintain good standing with creditors. If your account balance is sitting too close to the credit card limit, that can have a negative effect on your overall credit score.
3. Don’t Open Too Many Accounts At Once
Submitting too many credit applications within a short period of time can have a negative effect on your credit score. Whether you are approved for all the credit you applied for or not, those inquiries will show up on your credit reports. Basically, try to keep your credit reports from making you look needy or desperate for credit.
4. Check Your Credit Score regularly
The easiest way to do this is by getting a yearly report directly from each of the three major bureaus (Equifax, Experian, and TransUnion). If you find any mistakes or errors in these reports they can be corrected with a dispute process provided that they are still within their addressable time frame as specified under federal law.
5. Consider enlisting the help of a trustworthy credit repair service
The truth is that you can do the credit repair stuff yourself. But if that sounds too overwhelming for you to take on, you might prefer to enlist the help of a professional. But do a little research to make sure the company that you select is trustworthy and in conformity with federal and state laws.
Achieving and maintaining a good credit score is not rocket science. Allow the tips listed in this post to be starting points for your personal credit score improvement journey. And don’t be afraid to reach out to a financial advisor, non-profit debt-counseling service, or a trustworthy credit repair professional if you would like someone to hold your hand along the way.