Your credit score is a vital number that can determine your financial stability and opportunities. Your creditworthiness affects your ability to secure loans and credit cards, lease an apartment or obtain a mortgage. All of these things rely on good credit. Here are some key tips to help boost your credit score.
Check Your Credit Report
To begin, take a look at your credit report. There are three major credit bureaus with credit reports based on your financial history. Make sure to check all three, as they may have different information. If you spot any errors, you can dispute them with the credit bureau to have them amended. This can improve your score quickly. You are entitled to one free credit report from each bureau per year.
Pay Your Bills On Time
Paying your bills on time is the easiest way to boost your credit score. Late payments, even ones that are a few days late, can have a significant impact on your score. If you have trouble remembering when bills are due, consider setting up automatic payments.
Debt consolidation is a great option for those with multiple credit card balances. Consolidating balances onto one card, or into one loan, can help you consolidate debt and potentially lower interest rates. This can help you save money, plus make payments easier by only having to manage one monthly bill.
Eliminate Credit Card Balances
High credit card balances can hurt your credit score. Think about reducing them or eliminating them altogether. If your balance is too high or you are having trouble making payments, you can contact your credit card provider to work out a payment plan or lower your interest rate.
Be Careful About Opening and Closing Accounts
Opening and closing accounts can affect your credit score. Applying for lots of credit quickly or opening lots of new accounts in a short period of time will indicate to credit bureaus that you are a higher risk for defaulting on payment. Closing an account, especially an older one, can decrease the length of your credit history, and potentially lower your score. It’s important to be thoughtful and strategic about opening and closing accounts, and if possible, leave older credit cards open with small balances.
Credit counseling is always an excellent option if you need help creating and sticking to a budget, learning more about your credit score or developing a plan to boost your score. Resources like the National Foundation for Credit Counseling and Credit Karma offer free guidance and advice for those looking to learn more about their credit score and achieve financial health. Improving your credit score isn’t always easy, but taking the steps toward financial stability and good credit is definitely worth it.