4 Tips to Improve a Credit Score
Credit scores are created by a financial formula based on payment history, length of credit history, types of credit, credit limits, how much debt a person has, and any “hard credit inquiries” made recently.
Credit scores can range from the low 300’s to the mid 800’s. The higher the number, the better the score, and the better chance to be approved for credit.
Here are some ways to keep your credit score on track for any future financial goal:
Pay Bills on Time
This may seem like an obvious way to keep your credit score high, but payment history counts toward 35% of your overall credit score. One late payment can affect your overall credit score and take months to recover.
Life happens. If your income has decreased or a family emergency has changed the ability to repay a loan or debt, reach out to your lenders—they may be able to adjust to a temporary solution while you’re getting back on track.
Consider Balance Transfer for High Interest Credit Card Debt
The annual percentage rate (APR) can very from credit card to credit card. The better the credit score, is typically offered the lower the interest rate. This opportunity could save you money and lower your debt faster.
*According to Governing.com, the national average credit score is 687.
Apply for a Secured Credit Card
Working on building (or rebuilding) your credit score? Consider applying for a secured credit card to get started.
Secured credit cards typically require a deposit, which serves as collateral. If payments are made on time and you keep your account in good standing, your credit card lender may release your deposit after a certain number of months or when you close the account.
Review Your Credit Report Once a Year
Reviewing your credit report at least once a year can put you in a great place for your financial future. Your credit report includes information on payment history, lines of open credit, and enable you to be proactive about checking for any potential reporting errors.
Want to know more about credit scores and reports? Use our free online Credit Management tools to understand how to read your credit report and receive important tips to keep your credit score healthy.
