Simple Ways to Boost Your Credit Score
Improving and maintaining your credit score is one of the best ways to qualify for lower interest rates, acquire credit, and reduced insurance premiums. However, the majority of us don’t keep a close enough eye on our credit scores and frankly probably don’t understand them. How your credit score is actually determined is a topic for another post, but today we feel it’s important to give everyone a few methods to improve your current score and if you’re lucky, maintain a high one.
Pay Your Bills on Time
A significant portion of your credit score is determined by your history of making on time payments. Missing just a couple payments can knock your score down and which only time can heal. Do your best to get into a routine when it comes to paying bills, or better yet, organize your bills with online bill pay.
Keep Credit Balances Low
It’s good to use your credit, but not all of it. You will hear different percentages of how much of your credit you should actually spend, we think around 35 percent is a good number to try to stay under. In other words, if your credit card balance is $5,000 try not to charge more than $1750 on it. This shows that you have credit, but also restraint from blowing it all.
Don’t Cancel Your Oldest Cards
Another factor weighed into your credit score is your credit history. Because of this, you should try to keep your oldest accounts open to show that you are a good long-term customer. Even if you are not using your oldest cards, you will benefit by not closing the accounts.
Try to Avoid Pulling Your Credit
Each time you apply for a credit card or get a quote on a loan, your credit is pulled to help determine the amount of money a lender should give you as well as what interest rates. If you have an excessive amount of inquiries, it will negatively affect your score. It’s good to remember that shopping for loans is not a bad thing and is actually encourages, but try to keep your inquires within a 30 day window.
[Ben's Note: Don't forget that you are entitled to 1 free credit report a year and that there are 3 credit scoring bureaus; TransUnion, Experian, and Equifax. One more thing... MyFICO has a great deal of information in addition to a nice little widget on their front page that shows what your payments might be based on the loan amount and where you live against a spectrum of potential FICO scores, it really shows the difference in payments with a shift in your score! Read all about it.]
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