05 Jul 5 Simple Ways To Raise Your Credit Score
A lot of people ask, “What is the best way to build my credit score?” Well, the answer isn’t always as simple as they’d like, but it doesn’t have to be difficult either. When searching for the answer to this question you’ll get many different thoughts, ideas and methods on the matter.
There are plenty of ways you can build your score and even more ways to tear it down. You just have to have a simple approach to it and follow the tried and true methods of many people who are no longer in debt.
Here are 5 simple steps to help raise your credit score.
Request A Credit Report
First things first, when trying to raise your credit score you need to know exactly where your credit is sitting. Make sure that your credit history doesn’t contain anything you didn’t do yourself. If it contains something you don’t recognize seek professional help, as you may have been a victim of credit fraud.
If you don’t see anything out of the ordinary then you’ll just need to view your score and see what you have working for you and against you. This can help you determine what’s hurting and helping you when trying to raise and maintain your score.
You as an individual are entitled to one free credit report per year and it is highly suggested you use it. Even if you know you haven’t done anything crazy to your credit you want to make sure nobody else has. This can also help you know exactly where you are sitting before making a major purchase such a house or a car.
Pay On Time
While this may sound like a “no-brainer” a lot of people still struggle with paying their credit card bills on time. Maybe they forget or maybe they just put a balance on a card they usually have paid off. Either way, paying your credit card bills on time is key in keeping your credit score up.
In fact it’s so important that this category alone makes up over 35% of your score. If you find you are struggling with remembering to pay your bill on time try setting reminders or alerts. You can even build a calendar that is specifically for your credit card bills and put it in a place where you’ll see it often. This can help you raise your score and keep it up.
More Than The Minimum
While paying more than the minimum doesn’t raise your score, it can help you avoid interest charges, which in turn raise your credit balances. Any balances over 30% of the credit limit of your account have a negative impact on your credit.
There’s nothing quite like making a payment on a credit card and feeling good about it only to realize that the interest was so high it negated your payment entirely. Make sure that you pay attention to your balances and maintain a payment that is over the minimum amount due.
This will not only help you pay off the debt faster it will also raise your credit score at the same time.
Pay It Off
You probably see this headline and say to yourself, “Well, duh! I’d love to just pay off my debt.” While this is the case for you, others might struggle with the notion that instead of just paying off the debt they should move it to a credit card with a lower interest rate.
While this makes sense in theory, and if you are adamant about paying off your debt, it doesn’t always work for everyone. One of the main things this can do is open up a credit card you didn’t have open before to load more debt onto.
While interest rates are not your friend when trying to pay off your debt, you can use them as motivation to get the job done.
In the end, building your credit score doesn’t have to be as difficult as it sounds. While some items will stay on your credit report for quite some time others will be removed as soon as they are paid off. It’s all about working toward your goal of becoming debt free.
It starts with being proactive with your credit score and always knowing where you stand.
If you ever have any questions about your credit score, or if you have an overwhelming amount of debt that is preventing you from raising your score, contact us today.
We’d love to go over the options that are available to you to help you achieve financial freedom.