If you’re like most people, you probably don’t think much about your credit score until there’s a problem. And by then it might be too late. Your credit score is one of the most important numbers in your life, yet it’s also one of the least understood. A bad credit score can mean you pay more for everything from car loans to home mortgages to insurance premiums. A good credit score can save you thousands of dollars over the course of your lifetime.
So what is a credit score, and how can you keep yours high?
What Is A Credit Score?
Your credit score is a number between 300 and 850 which represents your overall creditworthiness. It’s based on the information in your credit report, which is a record of your credit activity over time.
The higher your score, the better your credit, and the more likely you are to qualify for loans and other forms of credit at favorable terms.
For example, if you are trying to get a mortgage, lenders will pull your credit score to help them decide whether or not to approve your loan application. Also, the higher your score, the lower the interest rate that you are likely to get.
How Can I Find Out My Credit Score?
You can get your credit score from a number of sources, including credit card companies, personal finance websites, and credit reporting agencies.
Most credit card companies now offer free credit scores to their customers. And many personal finance websites offer free credit scores as well.
If you want to get your score from a credit reporting agency, you’ll usually have to pay a fee. But there are some exceptions. For example, if you are denied credit, you can get a free copy of your credit report from the credit reporting agency.
Another way to get your credit score is to use a credit monitoring service. These services usually cost a monthly fee, but they offer a number of benefits, including access to your credit score.
If you are with a low credit score, you might be wondering what you can do to improve it.
How Can I Improve My Credit Score?
There are a number of things you can do to improve your credit score.
Here are a few tips:
Check Your Credit Report For Errors
If you find any, dispute them with the credit reporting agency. For example, if you have a late payment on your report, but you actually paid on time, you can dispute the error and have it removed. If you are having trouble repairing your credit on your own, you might want to seek the help of a credit repair attorney, who can help you navigate the process and improve your credit score. A good credit repair attorney can help you dispute errors on your credit report, and negotiate with creditors to get them to stop reporting late payments.
Make All Your Payments On Time
This includes credit card payments, mortgage payments, car loan payments, etc. Additionally, paying your bills on time can help improve your credit score.
Keep Your Credit Balances Low
This means using less than 30% of your credit limit on each credit card. Your credit score is partly based on how much of your available credit you’re using. So if you have a $1000 credit limit, and you’re carrying a balance of $500, that’s going to hurt your score. In addition, it’s important to keep your overall debt levels low. This includes both your credit card debt and your other debts, such as student loans and car loans.
Use a Mix of Different Types of Credit
This includes both installment loans (such as car loans) and revolving credit (such as credit cards). Having a mix of different types of credit is good for your score.
Installment loans are loans that you pay back in fixed monthly payments. For example, if you have a car loan, you’ll make the same payment each month until the loan is paid off. Additionally, installment loans tend to have lower interest rates than revolving credit.
Revolving credit is credit that you can use over and over again, up to a certain limit. For example, if you have a credit card with a $1000 limit, you can charge up to $1000 on the card and then pay it off. As you make payments,
Keep Your Oldest Credit Card Active
The length of your credit history is one factor that’s used to calculate your score. So if you have an old credit card that you don’t use anymore, it’s a good idea to keep it active by using it for small purchases and then paying off the balance in full each month.
For example, you might use your old credit card to buy gas or groceries once a month, and then pay off the balance in full when you get your bill.
Additionally, it’s a good idea to avoid opening new credit cards, as this can also hurt your score.
If you’re looking to improve your credit score, there are a number of things you can do.
The bottom line is that it takes time and effort to improve your credit score. But if you’re patient and consistent, you can see a significant improvement in your score over time. Check your credit report for errors and dispute them if necessary. Make all your payments on time, keep your credit balances low, and use a mix of different types of credit. Additionally, it’s important to keep your oldest credit card active to help improve your credit history.
If you’re having trouble or having a hard time improving your credit score on your own, you might want to seek the help of an attorney. A great credit repair attorney can help you dispute errors and negotiate with creditors to get them to stop reporting your late payments. Additionally, they can help you understand your rights and options when it comes to credit repair.