A lot seems to be riding on one’s credit score these days. Right or wrong, jobs, insurance premiums, and borrowing power can all be determined using one’s credit score as one benchmark. With this in mind, you want to protect your score and make sure it’s as good as possible.
If it’s not stellar, there are still some things you can do to improve your score.
1. Check your credit report. You will want to check reports from all three reporting agencies, Equifax, Trans Union, and Experian. Look for any errors in reporting. Do you see any cards or debts listed that aren’t in fact yours? Are credit card and loan companies reporting correct information? Also, check for any outstanding medical bills. Are they really your medical bills? Are they in dispute with the insurance company, or perhaps they were and have now been settled. You will want to clear up any errors and false information.
2. Pay your bills on time and pay at least the minimum amount due. With online bill pay offered at many financial institutions, this should be fairly simple. If you think you’re forgetful and worried about missing a payment, you might consider signing up for automatic payments to take some of the stress out of paying your bills.
3. Pay more than the minimum payment. This will help cut costs slightly and help you pay down your debt a little bit faster than making only the minimum payments. Eventually, it will also help your debt to income ratio.
4. If your debt to income ratio is already on the high side, but you’re in great standing with everything else, you may consider asking your card company for a line of credit increase. This will give you some wiggle room and help your score. Just don’t turn around and charge your card to the max or your credit score may take another plunge.
5. Additionally, with a decent score and payment history, you can also ask the card company for an interest rate decrease. Not only will this will help save you money in the long run, but in the short run it could keep your minimum amounts due lower thus allowing you to make payments greater than the minimum amount due. (See number 3)
6. Pay your credit card bills before they’re due so more of your money goes toward paying for the month’s purchases instead of interest.
7. Create a budget. Once completed, if your financial picture isn’t what you think it should be because of debt, consider debt consolidation to get back on track.
Have you recently improved your credit score? Share how you did it in the comments section of this blog!