Why boost your credit score? Your credit score serves as a point of reference for lenders and creditors to determine if you are creditworthy enough for a loan, mortgage, or credit card. Having a high credit score will make loan applications much easier, but if you have a low credit score you will most likely face higher interest rates, high down payments, or even rejected applications.
Thankfully, a low credit score is not the end of the world. There are easy steps you can take today to boost your credit score and make it as healthy as possible.
Check for Accuracy
Reporting agencies often make mistakes and may attribute an account or debt to the wrong person. Thanks to sites like CreditKarma, you have the ability to keep an eye on your credit score for free and check for any mistakes. Make sure to dispute any mistakes to keep your credit score accurate, to boost your credit score.
Pay Off Past Due Debts
Did you forget to pay your last electricity bill for the apartment you had three years ago? Do you still have a balance with your past cellphone carrier? It’s easy to forget about debts from years ago, but even a small unpaid debt can impact your credit score. Check for outstanding balances on your credit report. The sooner you pay them off, the sooner you’ll boost your credit score.
Don’t Use Your Credit Card Too Much
Having a credit card can be very useful because it gives you the chance to have more money available that you can pay off later. However, if you reach your credit card’s limit very often, it can lower your credit score. Learn more about credit utilization and the best ways to use your credit card here.
Open New Accounts
Credit history is another important element that determines your credit score. Having no credit may be as detrimental to you as having bad credit. Something as simple as getting a credit card or taking out a car loan can increase your credit score exponentially. Keep in mind that staying current with your payments is key when trying to boost your credit score.
Don’t let your past mistakes get in the way of getting the car, house, or credit card you want. If you’re financially responsible, let your credit score reflect it.
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