The words “credit score” often come with a headache, especially when you’re trying to figure out how to improve yours. That’s why we’re laying out three of the best ways to rebuild or improve your credit score and set yourself up for success.
Pay on time, all the time.
This is often easier said than done, but when it comes to your credit score, the importance of paying your bills on time cannot be overstated. Your payment history is one of the largest contributing factors to your score and having a late or missed payment can dock you a significant number of points. Setting yourself up for automatic payments for your rent or utility bills might help you stick to a better payment schedule, or you can also set up alerts when it comes time to pay your credit card bill. If you need assistance with setting a budget or making your current loan payments more manageable, please contact us and ask to schedule a budgeting session.
Use your credit wisely.
There is such a thing as good debt. When you use your credit card and pay back your bill on time, you are creating a consistent payment history that bumps up your credit score and tells lenders you are reliable. That being said, most sources recommend keeping your credit utilization “at or below 30 percent” because “having available credit indicated that you’re only using the credit that you need, which may be a positive sign for lenders” (Equifax). If you struggle to reduce your spending and stay under the 30% benchmark, you could consider asking your credit card company to increase your credit limit. An increase limit will lower your overall credit utilization and improve your score.
There are many ways to improve your credit, if you are not sure which ways would best fit you, please contact us to schedule a credit review session.
Consider credit-building tools.
Remember when we mentioned “good debt?” This is especially true when you consider solutions like secured credit cards or a secured personal loan. If you don’t have a lot of credit history built up yet, or your credit score is low and you need to rebuild your credit, secured loans are the perfect place to start. They help create positive credit history because they require that you make a deposit up front that matches the funds that will be given back to you. Then, you can make small payments at a low interest rate for at least 6 months and your credit score should begin to improve, assuming no late payments or other loans are made.
While rebuilding your credit takes time, these steps will help you on your way to a higher credit score and a healthier financial future! If you are interested in how Secured Advantage can help you improve your credit score with a loan or credit card, talk to our team today!
Sources:
https://www.nerdwallet.com/article/finance/raise-credit-score-fast
https://www.experian.com/blogs/ask-experian/credit-education/improving-credit/improve-credit-score/
https://www.equifax.com/personal/education/credit/score/how-to-improve-credit-score/
