Let’s Boost Your Credit Score!

Your credit score is like your financial report card and is an important financial indicator that affects your ability to get financing, rent an apartment, or even get a job in some cases. While it is important to maintain a good credit score, it’s equally important to know how to improve your credit score.
The first thing you are going to want to do if it’s been a while is to check your credit report for any inaccurate information. If you happen to find anything, it is important to dispute it as soon as possible. This will help you not come into any roadblocks when applying for financing. You can file a dispute directly with the credit reporting agency or the lender responsible for the error. It is imperative to provide accurate and supporting documents to support your dispute. So, make sure you have your ducks in a row!
Keep reading to find out the most significant ways you can improve your credit score!
Pay your bills on time! Lenders consider an individual’s track record of making timely payments on their loans and credit cards. Past behavior predicts future behavior! Late payments, defaults, and bankruptcy can significantly damage a person’s credit score. Making timely payments on all your financial obligations can help improve your credit score. Set up reminders or automatic payments to ensure you make payments on time. We do realize everyone makes mistakes and may fall on hard times, so if you see yourself in a difficult financial situation make sure you are in touch with your creditors. Communication.
Keep the amount of available credit you use under control! Your credit utilization ratio, which is the amount of credit you are using compared to your available credit limit, also affects your credit score. To keep your credit score from dropping and potentially raise your score, keep your credit utilization ratio below 30%. For example, if you have a credit card with a credit limit of $1000, your balance should never go above $300.
Be careful with credit inquiries. When lenders or credit card companies request a copy of an individual’s credit report, it counts as an inquiry. Too many inquiries in a short time period can lower a person’s credit score. According to FICO.com “If you apply for several credit cards within a short period of time, multiple inquiries will appear on your report. Looking for new credit can equate with higher risk, but most Credit Scores are not affected by multiple inquiries from auto, mortgage or student loan lenders within a short period of time. Typically, these are treated as a single inquiry and will have little impact on your credit scores.”
Diversify Your Credit Mix. Having a mix of different types of credit, such as credit cards, loans, and installment accounts, can help improve your credit score. This shows that you can manage different types of credit responsibly. However, be careful to avoid taking on too much debt or opening too many credit accounts at once.
Something that doesn’t have a direct impact on your credit score, but could definitely help you financially is building an emergency fund. Financial stability is important, and having savings can prevent you from relying on credit to cover unexpected expenses. Aim to have at least three to six months’ worth of living expenses saved up.
Improving your credit score takes time and perseverance. By implementing these strategies and being diligent with your finances, you can gradually improve your credit score and enhance your financial stability. With dedication and consistency, you can improve your credit score over time.
For additional questions on credit reports or for assistance on how to obtain a free credit report, stop by the Accentra Credit Union in Kasson 8:30-5, Monday-Friday and we will be happy to assist you.