There are many benefits to having a good credit score such as better rates on car insurance, lower credit card interest and having more housing options.
Learn how you can improve your credit score today!
Start with one credit card
Be careful not to make the mistake of opening too many credit cards too soon. If you’re a first-time credit card user, it’s okay to have just one card. The more credit you have, the more you will end up using and the harder it will be to keep up with your balances and payments. Too many inquiries into your credit and too many new credit cards can negatively affect your credit score.
Pay Bills on Time
Make sure you are paying your monthly bill on time or even a little early! Past due payments can stay on your credit reports for over seven years. Your credit score also suffers when you run up big credit card balances and don’t pay them off. Paying off these balances each month shows that you can pay bills, something creditors and lenders want to see. Since a large part of your credit score is based on the timeliness of your payments, paying your balances on time improves your credit.
Only use some of your available credit
Even if you are given a great sum to use, a credit card is not a green light to buy everything in sight – that’s the quickest way you can get into debt. Only buy things you can afford to pay back within a suitable time frame.
You will find it easier to borrow money and get new credit when you are able to be disciplined on how much you spend. Lenders understand people who max out their credit card have a challenging time paying it back.
Monitor your credit
Check your credit on a regular basis. If you notice it’s going down, do some research. If it is going up, great work – try to maintain or grow that score. FICO®, which is one credit-scoring company, says scores between 670 and 739 qualify as good. The longer you have had credit, the better it is for your credit score. Leave your oldest accounts open since they help increase your credit age and build good credit.
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