Having a high credit score gives you many different advantages over time on large purchases and other financial products. Not everyone is blessed with a solid credit history, so it’s important to understand how to address any credit issues you have right away. Giving up on your credit’s health could have you paying hundreds of dollars extra for loans or purchases on credit. It’s best to make a long-term goal to increase your credit score. Here are 11 resources you’ll need to get started on boosting your credit score and history.
1. Your Credit Report
The first tool you’ll need to help get your credit health back is a recent copy of your credit report. Consumers can request a copy of their free credit report once per year via the only authorized website for this,annualcreditreport.com. While your copy of your free credit report won’t have the score, it can give you some insight into what banks and credit agencies see before you apply for a loan. If you see something negative or wrong on your report, you’ll need to work to fix it or file a dispute with the credit reporting agencies.
2. Debt Calculator
Having too much debt is another roadblock to a great credit score. Most credit reporting agencies consider the amount of debt you owe in your credit score. If your debt to credit ratio is poor, you may experience more denials when applying for loans or credit cards. One resource that could help you harness heavy debt is a debt calculator. Calculators can help you make a plan to pay down heavy debt and get back to a clean slate.
3. Credit Counselor
Some experts also recommend consumers schedule consultations with credit counselors. It’s important to find a reputable credit counselor who won’t make unrealistic promises about taking away thousands of dollars of debt. A quality credit counseling organization typically doesn’t work for a profit, only to help struggling consumers. Credit counselors can help consumers make a plan to pay down a large amount of debt or make better choices to get their credit back on track.
4. A Payment Reminder Service
Today, more consumers than ever are taking advantage of convenient online bill pay for most of their monthly debts. Not all companies or banks offer online payment services, but it can help credit-challenged consumers get more control over their finances. Another idea that could work to help pay your debt down is to set up an automatic payment reminder service. With smartphones and email technology, most people could easily have quick reminders sent to them.
5. A Long-Term Credit Card Account
It’s also important to work hard to build your credit with accounts that have positive histories. People with high credit scores typically have one or more credit card accounts with a long history of on-time payments. Instead of closing old credit card accounts, keep them open and get back on good terms if you missed a payment or made one late. A solid credit history is another ingredient to a higher credit score.
6. A Higher Credit Limit
The amount of available credit you have can also influence how high your credit score goes. If you have several accounts with low credit limits, it may be worth a shot to call each card’s customer service line and request a higher limit. Consumers with some debt can get a small amount of score relief if their credit limit suddenly increases.
7. A Car Loan
Banks, loan officers, and credit reporting agencies also like to see consumers with installment loans in their credit history. One common type of installment loan is a car loan, so if you don’t have one, consider applying for one the next time you need a new set of wheels. It’s often a little easier to get approved for a car loan than other types of credit accounts, so you may get a good interest rate even if your score is somewhat low.
8. Knowledge About Credit
Consumers with the top scores also have something in common, knowledge about credit. It’s essential to take time to research as much as possible about credit cards, interest rates, banking, and financial services. This way you can teach yourself how to fix your credit. Having a better understanding of how credit and scoring works can help you make better financial choices and improve your score over time.
9. A Mortgage
Getting a mortgage is another way you can experience a higher score. Of course, it’s important to make sure you consistently pay your mortgage on time. Being approved for a home loan can be a challenge if you have a short credit history and a low score. But for most consumers, it makes more financial sense to consider buying a home instead of renting for a long period of time.
10. Authorized User Status
Those who have really struggled with poor credit may have to take some time to start over to rebuild their financial health. If someone has trouble getting approved for any type of loan, it may be wise to team up with a friend or family member for help. Ask your friend or family member to add you to a credit card as an authorized user. If you choose someone with a strong credit history, some of this consistency can help impact your own score.
11. Steady Income
Finally, the biggest way to improve your score over time is with regular, long-term income. If you aren’t able to pay your bills and meet your monthly financial obligations, you’ll always be behind and losing credit score points. If your current income isn’t able to keep you afloat, you may have to consider supplementing your income with a second job. This may be a temporary situation you’ll need to take on until your income is high enough.
Your credit is a valuable tool in helping you pay less for your biggest purchases, such as your home or car. If you have a low score, this could prevent you from reaching your goals and achieving the lifestyle you want. That’s why it’s so important to use these tools to help improve your score and get you where you want to be.