Maintain an Excellent Credit Rating
What is your current credit score? If you applied for a mortgage or personal loan would you be approved? When was the last time you reviewed your credit report? There are advertisements all over the internet that recommend you pull your free credit report. You are prompted to visit www.freecreditreport.com and view your information and score with three of the major credit reporting companies: Transunion, Experian, and Equifax. This report is free once per year and you will need to design a username and password to access your account. Once you gain access, you are to review your past and current credit transactions, what companies have made inquiries into your account, and ensure that your contact and address history are correct. Yet, what are simple steps to improve your credit score over time?
1. Do not open and close credit cards. Sometimes, persons may receive a tempting deal in the mail with a great credit rate and decide to open the new one and close an older one. Yet, remember that each action you take affects your credit score and may decrease your level of trustworthiness with creditors. Remember, the more credit checks that occur with your account, the lower your score will be. So, try to resist temptation and remain consistent with your current credit cards.
2. Watch your balance. Your credit score may be low due to your balances being close to the limit. For example, if your limit for a credit card is $25,000 and your balance is $23,000, this may be affecting your score as creditors may perceive you as overextending your financial abilities. Therefore, seek to decrease your balance to approximately one-third of your limit amount.
3. Pay early. As recommended by many, if you have available funds that you can contribute to the balance each month, it may be very beneficial to do so. One approach is to add 10% to the current payment you are making. For example, if your monthly payment is $200 then add an additional $20 to that payment. Also, if you are financially able, seek to make your monthly payment prior to the due date. For example, if the payment is due on May 15th then make your payment on May 1st. This may be very helpful in the long run regarding accumulating interest.
So, to improve your credit score over time use these three easy steps. Limit opening new credit cards as each request for your credit report can affect your score. Watch your balance and determine if it is too close to the limit. Finally, based on your funds, seek to make payments early. Hopefully, you will see an improvement and reach a score that is very satisfactory.