Finding out you have a bad credit score can bruise your ego. But it can also do much more damage than that. Your credit score can determine whether you’re approved for a mortgage, car loan, or an apartment rental.
If you’re just realizing that your credit standing can make or break your financial future, you’re not alone. According to a U.S. News & World Report Survey, more than one in three Americans don’t really understand the impact of bad credit.
But it’s not too late to get on track. Use these credit tips to help improve your credit score in no time.
Make Sure Your Credit Report Is Right
They say that knowledge is power. And when it comes to learning how to improve your credit score, knowing what’s on your credit report can be crucial.
Your credit report is different from your credit score, which you may be able to get from your bank or your credit card company. It’s a record of everything in your financial history such as bill payment, loans, and bankruptcy.
You can check your credit report for free once a year by visiting AnnualCreditReport.com. You’ll be able to access your reports from the three major credit reporting agencies, Equifax, Experian, and TransUnion.
There are a few important reasons to check your credit reports.
First, if you find any incorrect information, you can request a correction. This can be especially important if you find an inaccurate negative comment on your report. This kind of content can work against you on employment background checks or loan applications.
Staying up to date on your credit report can also ensure that there’s no suspicious activity—such as someone assuming your identity and opening accounts without your knowledge.
Don’t Miss Payment Deadlines
If you ask someone with good credit for tips to improve credit, he or she will probably tell you to set up automatic bill pay. And that’s for a good reason. Automating bills is a foolproof way to ensure you won’t miss any payment deadlines.
Prompt payment is a huge part of your credit score. In fact, it accounts for 35% of your score.
Keep Balances Low
While it may seem like one of the most obvious credit score tips, keeping low balances can be a big challenge. But it’s wise to do your best not to max out your credit cards. High balances can really hurt your credit score.
You’re helping yourself out by increasing the chance you’ll be able to pay off the balance each month, which lenders like to see.
Don’t Close Unused Credit Cards
Paying off a credit card is an amazing feeling. You may be tempted to close the account once you’ve reached that milestone, but resist that urge. Closing an account that is in good standing can actually harm your credit score.
Instead, keep the account open and use it on occasion. This strengthens your credit history by showing you know how to manage your credit.
Consider Consolidating Debt or Credit Score Counseling
If you’re in way over your head, consolidating your debt can have long-term benefits on your credit score. While you may experience a ding at first, it may be the easiest way for you to get on track.
You could also consider talking to a debt or credit score counselor to help manage your debt. Looking for a way to secure a loan with bad credit? Check out this information post.
Get More Credit Tips
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