4 Tips to Improve a Credit Score

4 Tips to Improve a Credit Score

Credit scores are created by a financial formula based on payment history, length of credit history, types of credit, credit limits, how much debt a person has, and any “hard credit inquiries” made recently.  Credit scores can range from the low 300’s to the mid 800’s.  The higher the number, the better the score, and the better chance to be approved for credit.

Improve your financial wellness by improving your credit score or by starting the journey on establishing a credit score.

Here are some ways to keep your credit score on track for any future financial goal:

Pay Bills on Time

This may seem like an obvious way to keep your credit score high, but payment history counts toward 35% of your overall credit score.  One late payment can affect your overall credit score and take months to recover. 

Life happens.  If your income has decreased or a family emergency has changed the ability to repay a loan or debt, reach out to your lenders—they may be able to adjust to a temporary solution while you’re getting back on track.

Use our free Budgeting Tool to see your fixed costs and flexible “flex” costs from a different view.

Balance Transfer High Interest Credit Card Debt

The annual percentage rate (APR) can very from credit card to credit card.  The better the credit score, is typically offered the lower the interest rate.

While the national average APR for credit cards is 16.41%*, you may want to consider a promotional balance transfer on any high interest credit cards.  This opportunity could save you money and lower your debt faster.

  *According to  Governing.com , the national average credit score is 687.

*According to Governing.com, the national average credit score is 687.

Apply for a Secured Credit Card

Working on building (or rebuilding) your credit score? Consider applying for a secured credit card to get started.

Secured credit cards typically require a deposit, which serves as collateral.  If payments are made on time and you keep your account in good standing, your credit card lender may release your deposit after a certain number of months or when you close the account.

Review Your Credit Report Once a Year

Reviewing your credit report at least once a year can put you in a great place for your financial future.  Your credit report includes information on payment history, lines of open credit, and enable you to be proactive about checking for any potential reporting errors. 

Pulling your own credit report is quick and free!  Visit AnnualCreditReport.com to retrieve your credit score and report.

Want to know more about credit scores and reports?  Use our free online Credit Management tool to understand how to read your credit report and receive important tip to keep your credit score healthy.

 

*National average APR based on rate survey by creditcards.com

4 Facts About Tax Identity Theft and How to Prevent It

4 Facts About Tax Identity Theft and How to Prevent It

9 Credit Card Definitions to Know

9 Credit Card Definitions to Know