Your credit is key in determining whether you qualify for low-interest loans, mortgages or premium rewards credit cards — so you want the number to be nothing less than excellent. Most credit scores operate within the range of 300 to 850; with 750 and above being excellent, 700-749 being good, 650-699 being fair, 600-649 being poor and below 600 being bad.
If you’ve got room to improve, here are some tips. But raising your score isn’t a quick process. It’ll take some time.
Here are seven tips to help you build better credit:
1. Make Sure Your Credit Reports Are Accurate
Check your credit reports. Your credit score is based on data in those reports, and they can sometimes include inaccuracies. Under the Fair Credit Reporting Act, you’re entitled to a free copy, once a year, from each of the three major credit bureaus — Experian, Equifax and TransUnion — through AnnualCreditReport.com. Make sure that your personal information is accurate, all of your credit accounts are being reported, no late or missed payments are inaccurately listed, no items from decades ago are still present and there are no unfamiliar accounts or applications.
If you find an error on all three credit reports, you’ll have to dispute it separately with each credit bureau. You’ll also have to file a separate dispute for each error you find.
2. Create a Plan to Improve Your Credit Score
Aim to keep your credit card balances on the lower end along with any other type of revolving credit you may have. Also, start paying down your debt rather than moving it around. Don’t attempt to open any new credit accounts that you don’t need, because more accounts can lower your score.
3. Fix Late Payments
Set up payment due date alerts with all your credit cards and loans and get organized. You can move credit card payment due dates around on your bank or lender’s website. Check your payment due dates in relation to your paycheck schedule.
Ask your credit card issuer or lender if they can forgive a late payment.
4. Clear Up Any Collection Accounts
Paying off your debt is a great way to boost your credit score. Contact the debt collector listed on your credit report to see if they’d be willing to stop reporting the debt to each major credit bureau in exchange for full payment. Get any promise in writing before you make a payment.
5. Get a Credit Card
If you’ve never had a credit card before, your scores may be suffering because of a lack of a good account mix. Make on-time payments — a new credit card account with a bad payment history will hurt you.
6. Limit Credit Applications
Your credit score takes a hit with each application whether approved or not. A hard inquiry will impact your credit score by about three to five points for a full year.
7. Fix Your Credit Utilization Ratio
Your credit card balances every month should be no more than 30% of your credit limits. Consider pre-paying some of the balance if you know you’ll be above that 30% mark this month.
ValueBank Texas provides many loan products, each suited to our individual customers. Visit us at ValuebankTexas.com/ or contact us at (361) 888-4451.
Corpus Christi, TX 78408
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