Credit Score Tips

Have you checked your credit score lately? Not only can poor credit affect insurance rates, but it can make it difficult for you to take out a loan for a home or a car. Even if you do get a loan with poor credit, you’ll likely pay much higher interest rates than you need to.

It’s also possible you’ll be denied for the best travel credit cards if your credit isn’t in good shape as well. The best credit options go to those with FICO scores that are over 740, or those with scores considered “very good.”

If you haven’t checked your credit score lately, you can see an estimate of your score for free at CreditKarma.com or CreditSesame.com. Once you find out where you stand, here are five steps you can take to boost your score this year:

Make All Payments on Time

The #1 determinant of your credit score is your ability to make payments on time every month. Late payments can wreak havoc on your credit score, even if it only happens a few times.

To boost your score as much as you can this year, make sure you are paying all bills on time, including credit cards, utilities, car payments, and your rent or mortgage payment.

Pay Down Debt

The next biggest determinant of your credit score is your utilization – or how much you owe in relation to your credit limits. You shouldn’t have any credit card debt if you’re pursuing points and miles, but if you do, you should strive to pay it off right away. You can also boost your credit score by paying down other types of debt like car loans or personal loans.

Quit Opening New Accounts Temporarily

New credit is another factor that can impact your credit score. Opening new credit card accounts leads to hard inquiries on your credit report, and those inquiries can cause your score to drop temporarily.

If you’re trying to build your credit score this year, it’s wise to limit new credit and only sign up for new cards when it’s necessary.

Keep Old Accounts Open

Another factor that impacts your FICO score is the average length of your credit history. The longer your credit history the better off you are, which is why you should keep old accounts open – even if you’re not using them.

Keep this in mind as you consider closing cards to avoid annual fees or simplify your rewards game. If you’re worried closing an account will hurt your score but don’t want to pay an annual fee, you can also consider downgrading to a no-fee option.

Get Added As An Authorized User

Last but not least, having a spouse or trusted relative add you as an authorized user on their credit card can help your score if you have a thin credit profile.

While authorized user accounts aren’t weighed as heavily by the credit reporting agencies when determining your score, this strategy can still be a positive step toward building a credit report, notes Experian.

July 24, 2018
5 Ways to Boost Your Credit Score This Year

Ways to Boost Your Credit Score

Have you checked your credit score lately? Not only can poor credit affect insurance rates, but it can make it difficult for you to take out […]
May 15, 2018

Earn Extra Credit, Use It Wisely

A good credit card customer can expect a lot of advantages some are not even specifically are from acquiring the credit card.  Some are simply due […]
April 17, 2018

Top Ways to Build Your Credit

What are some tips for building your credit? Everyone wants to have a good credit history.  This allows them to qualify for a loan from any […]
March 6, 2018
How Many Credit Cards Is It Good To Have?

How Many Credit Cards Is It Good To Have?

Thousands of dollars are spent every day by people using their credit cards. People swipe their cards to make purchases that they want and purchases that […]