4 Tips for Improving Your Credit Score

nicholas-fainlight-improve-credit-score

Once you graduate college and begin your life after school, you likely realize how important a credit score is for various decisions. You may have had to deal with issues relating to your credit score beforehand, but it’s certainly something you must pay attention to now. Your credit score affects whether or not you can open credit cards, get a car loan, or get approved for a mortgage. Many landlords also want to know your credit score to see how reliable you are when it comes to making payments. You may have a low credit score or not much credit at all, but there are certainly steps you can take to build it into a respectable number. However, you need to understand that it takes time and hard work to reach an excellent score.

Open accounts with credit

For many recent graduates, you might not have much credit at all, which leads to a low score. The first step to take is opening accounts that utilize your credit; the earlier you take this step, the better. There are plenty of student credit cards out there that are easy to get approved on, or ask your parents to add you to one of theirs. Even using the card a few times a month and then immediately paying it off helps improve your credit score. Be aware that opening new forms of credit means a credit report will be pulled for you to be approved, which often temporary drops your credit score a few points. This drop is completely normal and goes back to what it should be within a few months.

Make payments on time

Something that seriously damages your credit score is making late payments. Even a single late payment on credit can lower your score. If you’ve been notorious for this issue and it’s what caused your score to be so low, change your methods starting today. Set alerts for when your payments are due or even set up automatic payments so you don’t have to worry about forgetting at all.

Regularly check your credit score

If you want to really make a difference in your credit score, you need to be aware of any changes to it, whether positive or negative. The more you familiarize yourself with the score and see fluctuations, the better able you are to make decisions that impact your finances. It’s also important to regularly check your credit score so if a fraudulent account is ever opened in your name, you can report it as soon as possible and prevent it from seriously affecting you. Credit Karma is a great resource to use and can be downloaded as an app on your phone.

Pay off debt

If you want to see immense improvement to your credit score, pay off current debt. Even paying off a single debt can boost your score several points. Make larger payments than required and avoid paying more interest than you have to. While paying off your debt, consider using the debt snowball method in order to receive the maximum benefit.

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