How to Boost Your Credit Score
If you are thinking about purchasing a car or house or just need to borrow some money, your credit score will largely determine the terms of your loan. If your credit score is lower than you like due to missed payments or maxed-out cards, you may feel like you are doomed to a lifetime of high interest rates. Don’t lose all hope, though; raising your credit score is possible and worth the effort. With a few strategies and a commitment to smart money management, you’ll boost your score and probably save yourself a lot of money along the way!
Find your score. Ask a Route 31 representative for your credit score. Credit scores range from 300 to 850. A score around 700 is considered good, while anything above 720 is excellent. A score below 620 is generally considered poor. Once you know your starting point you can create a goal credit score and map out a plan of how you will get there.
Pay down your credit card bills. Start by paying down your card with the highest interest rate first and aim to get all balances below 50% of your credit limit. Since 33% of your credit score is based on the amount you owe, work on relieving your debt in any way you can.
Make all payments on time. Even if you can only afford to make the minimum payment, make sure you at least pay your bills on time. Consistent on-time payments for only one month can raise your credit score by up to 20 points. If you have the funds, aim to pay bills twice a month instead of once. This will help your payment history as well as keeping your credit utilization low, another factor in credit score.
Don’t close old accounts. A part of your credit score comes from how long you’ve had credit, and the longer a card is open, the higher your score will be. Keep old accounts open; they can help boost your score and balance out newer lines of credit.
Don’t open new cards you don’t need. Avoid opening new cards at department stores or gas stations for a one-time promotional discount. New cards carry 10% of your credit score and can bring down the average age of your credit, lowering your score even more.
Don’t be afraid to ask for help. Sometimes credit scores and reports are overwhelming. Please contact one of Route 31’s capable financial coaches for a free credit consultation. Our advisors can assess your unique situation and help you map out a plan for improving your credit score.