3 Tips for Building a Better Credit Score
Having a good credit score is something we know we should have.It’s an important part of making big purchases, like a new car or home and getting approved for credit. Building good credit is a continuous process, and we have some tips on how to give yours a boost.
Research from PYMNTS and Elan’s Credit Score Literacy And Building Credit Report shows that 62 percent of surveyed consumers want to improve their credit scores and 29 percent are very concerned about their credit scores.
Before you can work on improving your score, you need to know your current number. Double check the information the credit bureaus have about you. If any information is wrong, you can help your credit score by having it corrected. There are multiple sources, like https://www.annualcreditreport.com, where you can receive a free credit report.
Pay Your Bills on TimePaying credit card bills and loans on time is one easy way to ensure your credit score remains in good standing. Make yourself a schedule to prevent missing loan or credit card due dates. Setting up automatic payments can help ensure you’re always on time.
Control Your Credit Card Debt
When possible, it is best to pay off your balance each month. If you cannot pay the full balance by the end of the billing cycle, we would recommend keeping your credit utilization under 30% of your available credit limit.
Open Another Form of CreditIf you are building a new credit profile, additional forms of credit can be beneficial. Your credit score is partially based on your credit history and your debt capacity. Having multiple types of credit is good, as long as you manage the payments and pay it off on time. For example, a second credit card, like a department store card, or an auto loan are both good options. The most important part is to ensure you aren’t overwhelmed and can make the payments on time.
Remember that opening a line of credit could bring down your score temporarily.
Improving a credit score can take time and needs a plan, especially if you are applying for a loan in the near future. The stronger your credit score, the more likely you’ll qualify for credit cards with lower rates and better rewards, obtain better car insurance rates and even get a job or your dream home.