Education

TIPS ON RAISING YOUR CREDIT SCORE

Did you know that a low credit score can make getting a loan or credit card harder and can cost you more in interest charges?

Is your score in need of a boost?

While you can’t raise your score overnight, here are some things to start doing right now that can make a positive difference in just a few months.

- Review your credit report and look closely for any errors that show late payments or incorrect credit limits on cards. Immediately report any errors.

You can get one free credit report every year from each of the three major credit-reporting agencies – Equifax, Experian and TransUnion. You can choose to request them all at once or spread the requests out over a period of months.

While these reports won't show your actual credit score, they do give you vital insight into the categories that affect that score.

To request your free credit reports go to: www.annualcreditreport.com.

- Always pay your bills on time. Late or missed payments will quickly drag down your credit score.

Take advantage of payment reminders or online bill pay through your financial institution to make sure things like credit card bills, utility bills and loan payments are paid on time.

If you have any overdue bills, contact the biller and make plans to get them caught up. Letting an overdue account go to a collections agency can damage your score for up to seven years.

- Pay down your credit card balances. The less you owe, the more it will help your credit score. A good guideline is to keep your balance below 30% of your credit limit on each card.

Don’t automatically close unused or paid-down credit cards, especially if you have had them for a long time. A long credit history can have a positive effect on your score.

Don’t apply for multiple credit cards or charge accounts in a short amount of time. You may lose a few points each time a creditor checks your report after you have filled out an application.

- Focus your loan applications. When you're looking for a new auto loan or mortgage, try to submit all of your applications within a 2-week period.  For these types of loans, multiple inquiries within a two-week period are treated as a single inquiry, and won’t hurt your credit score like multiple credit card inquires will.

While you need to be aware that there are some things - like a bankruptcy or foreclosure – that can damage your credit score for years, doing your best to pay your regular bills can help bring that number up.

So stay vigilant about paying your bills on time, and check your credit report at least once a year. Getting that credit score up can go a long way toward building a solid financial future.