How to Improve Your Credit Score

How to Improve Your Credit Score

Why Is a Good Credit Score So Important?

Having a good credit score has a ton of benefits including:

• Approval for Home Mortgage, Auto Loan, and Credit Cards
• Lower Interest Rates for Loans, Credit Cards, and higher limits
• No security deposits on everyday household services like cable and utilities

On the flip side, if you have a bad credit score you are at a higher risk of being denied for home and auto loans and credit. Furthermore, even with approval you will face higher interest rates and steep monthly payments, and will be forced to pay security deposits for household utilities.

As you can see from the reasonings above, it’s very important to have a good credit score in order to be financially sound. Now let’s dive into some of the ways you can improve your credit score!

How to Improve Your Credit Score

Step 1: Check Your Credit Score

Get Your Free Credit Score Over Here

Step 2: Analyze Your Credit Report Regularly

Step 3: Pay Your Bills On Time, Every Time

One of the most important keys in having good credit is ALWAYS paying your credit cards and loans on time. In terms of impact, payment history makes up 35% of your credit score.

One way to ensure you never miss a payment is to set up automatic payments, or if that option isn’t available set up monthly reminders. I personally always have automatic payments turned on, because otherwise there’s no way I could remember when everything is due.

Consistently making payments on time can increase your credit score in just a few months, so it’s definitely worth the extra effort.

Step 4: Avoid Opening Up Store Credit Cards During the Holidays

Step 5: Pay Off “Maxed Out” Credit Cards First

If you have balances on multiple credit cards, it’s best to pay off the credit cards with the highest use first. This will help bring down your credit utilization rate which also has a high impact (30%) on your credit score.

Remember: Going over the limit on your credit cards can lead to penalties and fines, while keeping a healthy balance on your cards can help improve your rating as a safe borrower and overall improve your score.

That’s just another reason I love the free credit report card on Credit.com because it keeps track of the balances of all open credit cards, making it easy to see which needs to be paid off first.

Step 6: Don’t Be Afraid to Ask For Help, If Needed

Lastly, it’s completely okay to ask for professional help in improving and repairing your credit. Often times creditors can make it difficult to correct simple errors to your accounts, and that’s where it is helpful to contact knowledgeable firms like Lexington Law, who are trusted leaders in credit repair.

They offer a free credit repair consultation and work with clients to improve their credit score and to give them financial peace of mind. With the right steps, improving and repairing your credit is completely possible and often times you just need a little help to get there.