Your credit score is important for many different reasons. For one, it helps you improve your chances of getting a loan from banks, credit card companies, and mortgage lenders. It also plays a role in how high your interest rates are. The better your credit score is, the more lenders are willing to give you a lower interest rate since they see you are responsible with your finances.
Lastly, you credit score affects your chances of being approved for our rental. Needless to say, your credit score is incredibly important. So, if you find yourself with a low score, it’s in your best interest to raise it as much as possible. Here are some of the best ways to start improving your score right away.
Pay Off Your Debts
If you owe debts, it’s important to start paying them off as soon as possible. Not only will this help improve your credit score, but it will also give you a better quality of life. You don’t want to find yourself over the age of 70 with a significant amount of debt looming over your head. Paying off your debts may require a certain amount of self-discipline until they’re paid off.
Try to find creative ways to spend less so that you can put your money toward paying off your bills. The lower your credit card balance is, the more your score increases. Financial experts recommend always keeping a balance of 30% or lower of your total credit limit.
Pay Your Bills on Time
Paying your bills on time is an extremely important aspect of building a good credit score. If you pay your bills late, you won’t build credibility for yourself amongst lenders. If you’re someone who frequently forgets dates, consider signing up for automatic payments.
That way you know your bills will get paid without having to remind yourself. Autopay can be set up to whatever amount you want each month and will come directly out of your bank account.
Review Your Credit Report Regularly
It’s important that you keep a close eye on your credit report so that you know of any outstanding bills, and note any inaccuracies. If you do find that something is on your credit report that shouldn’t be there, you should dispute it immediately. Once they’re corrected, your credit score we’ll go back up.
Don’t Apply For Too Many Cards
Each time that you apply for a new credit card your credit score is hit with a hard inquiry. It’s best to keep a few accounts in good standing rather than having multiple accounts with a balance owed. So, before you start applying for new credit cards, focus on paying off the ones that you already have. Once they’re paid off you’ll find your credit score is significantly raised.