Helpful Tips to Boost Your Credit Score

A bad credit score is like a huge barrier, limiting all of your financial decisions and goals. According to msn.MONEY, scores under 620 can “make obtaining loans and credit cards with reasonable terms difficult.” It can be an embarrassing topic to discuss and reveal when the numbers are, let’s say, less than desirable, however, you are not alone, as there are millions of Americans in the same boat, and there is help for improving your credit and moving on with your life.

The first step to taking control of your credit score is to know what your current scores are from the three credit bureaus (Experian, TransUnion and Equifax). The Fair Credit Reporting Act (FCRA) states that each person is allowed one free credit report in a 12 month period. The following sites are good references for obtaining your scores:

Once you know where you stand, you can be proactive in repairing or improving your score by making a financial plan and referring to these helpful tips provided by msn.MONEY.

1.    Apply for a credit card and make sure to pay it off every month. Be sure that the purchases you make on the card can be paid off in full every month, so that you do not carry a balance. Carrying a balance from month to month is an easy way to fall into credit card debt and is the reason why many people establish bad credit in the first place. If you are unable to get a regular card, you can get a secured credit card issued by a bank in which you deposit money to, and you can only make purchases equal to that amount so you can never go over your limit. Make sure that the card you apply for reports to all three credit bureaus.

2.    Apply for a small installment loan. An installment loan (personal, auto, mortgage and student loans) is a way to show financial responsibility by making regular payments to pay it down over a period of time. Again, make sure that the loan is reported to all three credit bureaus.

3.    Pay down your credit cards. Pay down the balances on your existing cards to increase the gap between the amount of credit used and the credit limit, as lenders like to see a big gap between the two. A good rule of thumb is to spend less than 30% of your credit limit on each card. So if your limit is $5,000, do not spend more than $1,500 on that card. Instead of paying down the card with the highest interest rate first, you may want to pay down the cards that are closest to their limit first and get the balance below 30% of the limit.

4.    Use your cards lightly. Don’t carry high balances on your cards, even if you do pay them off in full every month. The balance on your monthly statement is what is reported to the credit bureaus, so keep the balance under 30% of the limit. If you need to, you can divide purchases on separate cards to keep the balances down, or make a payment on the card before the monthly statement is generated. Many credit card companies allow you to set up text/email alerts to notify you when you are about to reach the limit so you can keep track of your balance each month.

Improving your credit report by making a plan to show financial responsibility will open many doors to financial freedom in the future. Establish good credit by setting a budget to manage your credit cards and pay down loans. It takes time to raise your score, but making the commitment to do so is a huge step and one worth taking. Don’t’ let a bad score hold you back from achieving your financial goals.

 

Thank you for visiting Renting Tips, Sponsored by Gold Tree Properties, LLC.

 

*Information provided by msn.TODAY (http://money.msn.com/credit-rating/9-fast-fixes-for-your-credit-scores-weston.aspx). This website is not at all affiliated with the websites referenced.

Advertisements

About RentingTips
A blog designed to help educate renters on what to look for and how to make the most of their rental property experience.

What did you think?

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s

%d bloggers like this: