I think every adult in America would like to boost their credit score in some way, I mean unless you have 850 FICO Score which is perfect. Our American way of life is ruled by debt so how do we maintain a decent credit score or even boost it when we are in the debt cycle? There are some very easy things you can do to boost your score and keep it that way. Just know that there is not an instant boost to your credit, it could take some time but it is possible to improve your score.
The Big Goal: On Time
The NUMBER ONE thing you can do to improve your credit score is to maintain a good payment history. This means, make your payment on time every time. Payment history accounts for the biggest portion of your credit score so take this seriously. Even one missed or late payment can have a damaging impact on your FICO Score.
Credit Cards and Balances
Another thing to keep in mind is the balances on your credit cards. As these are revolving lines of credit, it is important to keep your balances as low as possible. This shows you are responsible with the credit limits that are available to you and positively impact your score. The more credit you have available on your credit card, the better it looks when calculating your score.
If you are not using a particular credit card and think you want to close it, don’t. Let the card issuer eventually close it for non-use. If you close a line of credit it affects the amount you have available in your revolving category and it could negatively impact your score. Keep the card open and just don’t use it. The card issuer will eventually close it and your score will not be affected.
Be careful when applying for credit and don’t do it all the time. Every time you apply for a loan it impacts your score and it is generally not positive. Keep that in mind next time you think you want to open a store card or get a new cell phone plan. Even your wireless provider pulls a credit report now. Anytime someone needs your social security number for something, you can be guaranteed they are running a credit check. So make sure you are only applying for credit when you need too and not because you want an extra 10% off at checkout.
Monitoring Your Score
Keep an eye on your credit at all times. Not only will this help you maintain a decent score, but it will also help you stop potential identity theft. Use an app like Credit Karma or your monthly statement from certain card providers include your credit score. Take advantage of these free avenues to monitor your credit throughout the year. At least once a year jump on annualcreditreport.com and pull your actual credit reports as well. This way you will always know what is going on with your credit and you can keep that score up.
Finally, be patient. Your score is not going to jump overnight and it could take some work to clean up derogatory items on your report. Just know that the more time and effort you invest in boosting your score, the more it will jump. Make sure you are questioning anything on your report that you don’t recognize and try to get all the derogatory items off of your report. Sometimes credit agencies will pull them off after a certain amount of time, but not always so be prepared with your good payment history to counteract the negative.
Also, here are some helpful links for all things credit. Take a look and let us know what your favorite tip is for boosting your score.
To help get a better handle on your financial health, check out the financial planning offerings at RMCU. We are happy to serve you and help your money work better for you!
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