Do you know your credit score? If not, it’s worth taking the time to find out. Credit scores are a reflection of how well we manage our finances and can have a significant impact on everything from getting approved for loans or mortgages to what interest rates we pay. The good news is that there are things you can do every day to help improve your credit score!
Tips
for Cleaning Up Your Credit Score
Break
the Problem Into Manageable Pieces
The credit score is a number that measures your ability to repay
debts. It is calculated based on your debt repayment history, the length of
time you have had open lines of credit, and the types of accounts you have
open. A high credit score means
that you are well-managed with low risk for creditors; conversely a low credit
score can indicate an increased risk for creditors and possible higher interest
rates or even denial of some loan requests.
Pick One Debt and Attack It Head On
If you’re reading this, chances are that you’re feeling
overwhelmed by debt. You don’t know which debt to pay first or how much money
to put towards it. The good news is that there is a solution for your problem:
pick one debt and attack it head on!
Raise Your Credit Limit
Credit is something we all need to function in today’s society,
but often there are misconceptions about how it works. Did you know that using
a small portion of your credit limits can help raise your credit score? As a
general rule of thumb, keeping balances below 30% on any card account could be
very beneficial for the long term and should help with some lower scores!
Paying down cards before their due date or limiting when they’re used will also
have an effect on this number as well.
Don’t Cancel Credit Cards
Cancelling cards that are paid off or not being used can lead to
a lower credit score. When you cancel your card, the balance on it decreases
and is no longer included in your total debt ratio for calculating this number.
The more balances there are on each card account reduces their individual
impacts when they come into play with other factors such as payment history,
types of accounts opened by consumers (e.g., student loans), etc. which all
affect how much risk banks believe our borrowers pose them if we take out new
lines of credit from those financial institutions.
Read More: https://www.creditrepairease.com/blog/6-tips-for-cleaning-up-your-credit-score/
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