Your credit score can either make you or break you when it comes to applying for loans and other financial things. If you have a low credit score, you probably want to try and get back up to a good number.
1. Check your score:
The very first thing you should do is check your credit score. There are a few different reports you can run in order to see your credit score. The FICO score is the most important report you should run. Once you know exactly where you are on the credit score range, you will be able to get started repairing your score.
2. Credit Card:
If you are having a hard time building up credit in the first place, you should try to apply for credit card. If you have the money to pay it off on a monthly basis, you will be able to start building up your credit score. You should only apply for a credit card if you know you will be able to make the monthly payments.
3. Using the credit card minimally:
If you have a credit card and you have a hard time paying the large monthly bill, try using the credit card less. The less money you add to your credit card bill means the less money you will have to pay at the end of the month. This might mean you have to make some cuts in your spending limits.
4. Monthly payments on time:
No matter what kinds of bills you might have, one of the best ways to bring up your credit score is to pay them on time. When you are late on payments, you are penalized with a late fee. The more late fees you have on your account means you will have more damage done to your credit score.
5. Full monthly payments:
If you pay your bills in full each month, you won’t have to worry about a low credit score. Most companies want you to keep a balance so you have to pay interest every month. If you never leave a balance on your account, you won’t have to pay interest and your credit score will be in good standing.
6. Talk to companies:
If you happen to make a late payment once, you should call the company and plead your case. Most companies will let the first late payment slide and take the fee off of your account.
7. Multiple cards:
If you have multiple credit cards, cut down to only one or two that you actually use. If you aren’t spending the money on these credit cards, you won’t have to worry about paying multiple balances at the end of each month. The less money you spend on these cards, the easier it will be to fully pay them off.
8. Know your limits:
If your credit cards have different limits, make sure you keep them under control. If you go over your credit limit, you will be penalized and your account will be put on hold.
9. Secured credit card:
Individuals who have a lower than normal FICO score should apply for secured credit cards. You will have to put a deposit down but this will keep your credit card secured during those difficult months.
10. Applying for cards/loans:
Make sure you don’t apply for too many credit cards or loans at once. The more debt you have at once, the more likely you are to have a lower credit score. Having only one or two credit cards will also make it easier to make payments monthly.
Keeping your credit score in good health is crucial for just about everything in life. To get a house, a loan, or even a new car will require a decent credit score.