3 Simple Tips To Begin Improving Your Credit Score
Divas, I’ve got a question for you! How many times in your adult life have you been reminded of the importance of a good credit score? I can easily count 10 separate times in my adult life when my credit score has played an important role. Financing a car…applying for a student loan…getting cable TV…in each of these instances, my credit score was the obvious difference between getting it, and not getting it!
I have recently found that many of my peers are in the process of building their credit scores for various reasons. This got me to thinking of the many different factors that affect ones credit score. In speaking with my peers, I also became aware of the many misconceptions associated with building credit. Since the Martini Chronicles is all about sharing and exchanging information, I thought it would be a good idea to create a series of posts dedicated to sharing credit score building tips. Let’s call this post Part One shall we!
Let’s start this series with 3 simple tips to begin improving your credit score. I am currently in the process of building my credit score, so I figured I’d share these tips that I’ve gathered from various sources. I think these tips are also great for those who are attempting to repair their credit. Read on and let me know what you think! As always, please feel free to share additional tips in the Comments section below.
1. Check Your Credit Report – We all know what a credit report is…it’s a detailed report of your credit history as reported by lenders who have extended you credit. The report provides a ton of useful information, including “what types of credit you use, the length of time your accounts have been open, and whether you've paid your bills on time.” Ideally, checking your credit report will alert you to any discrepancies, and will put you in a position to resolve those discrepancies that may be hurting your credit score. You should get your credit report from all three reporting agencies at least once a year (TransUnion, Equifax, and Experian). My paranoia forces me, however, to check mine twice a year…just in case. In any event, this is a great place to start learning about your credit history, which is important if you’re going to improve your score. (Source: MyFico.com)
2. Pay Down Credit Cards – You should constantly work towards paying down credit card balances, as reducing the amount of debt you owe can boost your credit score. Having a credit card balance 25-30% below the credit limit can dramatically increase your credit score. You should also work on continuously keeping your credit card balance low, or paying off balances completely each month.
3. Pay Bills On Time – Pay your bills on time all the time. Delinquent payments can negatively impact your credit score in a big way. One way to ensure that your bills are paid on time is to set up automatic payments with your bank or the lender. If you have missed payments in the past, catch up and get back on track. Also, if you are having trouble making payments, contact the payee and see if you can work out a deal…but don’t ignore them. Ignored debts may be sent to a collection agency….collection accounts stay on your credit report for seven years (ouch!).
That’s it…three simple tips that can jump start the credit score building process. Be sure to check in with the Martini Chronicles for additional credit score building tips.
Part Deux coming soon!