Tips For Keeping Your Credit Score Intact
Are you ready for a fresh financial start this year? Here are a few simple ways to spring clean your credit score, and begin this day to pay down your debt.
Order a copy of your credit report. Consumers have access to one free copy per year from the three main reporting agencies: Equifax, Experian, and TransUnion. Go to www.annualcreditreport.com to request a copy of your credit report from all three agencies. Your credit report will give you a detailed list of all your financial history, and give you your FICO score, the three digit number that banks and lenders use when determining a loan, and your interest rate. Now that you know your FICO score, you can begin to work to raise that number.
Pay All Your Bills On Time. 30% of your score is based on how reliable you’re with your payments. Set a goal today to pay all of your bills on time. It’s a good policy anyway, and it will help to increase your credit score.
Don’t Max Out Any Line of Credit. Another 30% of your score comes from the amount of available credit that you have. It is good to stay under 50% of your available credit”20-30% is best. Don’t close out lines of credit either”even if you don’t use them. Having credit available to you’ll help to boost that credit score even more.
Don’t Apply for All Available Credit. 10% of your score is based on whether or not you’re searching for new credit. Each department store card you apply for reflects as a negative to your FICO score. Think twice before filling out that next credit card application.
Maintain relationships with your credit card companies. 15% of your score is based on the length of time that you’ve had your line of credit. This is another reason that it pays to keep these lines of credit open”even if they’re dormant.
Keep Your Balance. The remaining 10% of your score is based on the balance of your debt, such as the ratio of bank card debt to installment loans. This is tricky, and doesn’t play a large part in your credit score, so most experts advise skipping this.
Experts agree that raising your credit score is one important step in the journey toward debt elimination. Use these tips to help boost your score, and put you one step closer to your goal.
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