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FOUR TIPS TO IMPROVE YOUR CREDIT SCORE

four tips to improve credit score credit card artwork

So: You’re starting to set some bigger financial goals and realize your credit score is pretty darn important. Don’t worry – you are not alone. A lot of people don’t start acknowledging the importance of their credit until it’s a tad too late. The good news? We have some ways to help you improve your credit, no matter where you are on your financial or professional path.

Whether you’re buying that first home, paying off student loans or simply getting informed, these four tips will help you improve your score and set your goals in motion!

  • Mind your balance. Many people don’t know that a big factor in credit scoring is how much revolving credit they have versus how much they’re actually using. In English? Even if you’re paying your balance each month, your score may reflect the balances you incur during the month. In other words, if you consistently charge $2,000 to your card, bureaus may see that as risky. Pro tip: Keep your balance to 30 percent or less of your total credit line within each payment period.
  • There is “good” debt. No, really. Many people think that old debt on their credit report is bad news. But it can be a positive thing. “Good debt — debt that you’ve handled well and paid as agreed – is good for your credit,” says credit guru John Ulzheimer.*In short: Don’t close old accounts where you’ve had a strong repayment history, even if they’re paid off. Think of it as having A’s on your transcripts and then asking the Dean to remove them years later.
  • Keep risk to yourself. Another leading metric that credit bureaus consider is potential risk factor. What does “potential risk” look like? Usually any sudden changes in patterns like paying less or charging more than you typically do and, of course, missing payments. Other “risky” behaviors: Withdrawing cash advances or using credit for transactions that indicate financial stress (e.g., loans from a payday lender). In these instances, try to write a check or use your debit card.
  • The best things in life are free. Including credit reports. Yes, free credit reports exist! And we’re here to tell you to use them. Any credit expert will tell you it’s in your best interest to regularly view your credit report. After all, how can you fix something if you don’t know it’s broken? Everyone is entitled to a free credit report once every 12 months from the three credit bureaus - Equifax, Experian and TransUnion - through AnnualCreditReport.com. The trick: Stagger each freebie once every four months and you can monitor your credit for free, year-round!

Well there you go, Savvy Savers. If you leverage these tips to improve your credit score, you’ll be well on your way. And of course, we’re always just a click or visit away with various optionsto get you on the right side of credit

*http://www.bankrate.com/finance/debt/7-simple-ways-improve-credit-score-1.aspx