When it comes to your personal finances, there is nothing quite as perilous as managing your credit. Much like trust, creditworthiness is easy to lose but hard to build up.
Whether you have good credit, bad credit, or find yourself anywhere in between, there is no escaping the reality of credit’s importance within our consumer-driven society.
Failing to maintain good standing with the three major credit bureaus – Equifax, Experian, and TransUnion – will all but ensure that you will be prevented from acquiring things that you want.
With that in mind, we have compiled the following list of tips that can help you no matter where you fall on the credit score continuum:
Know Where You Stand
You can’t correct a problem if you don’t even understand its scope. Make sure you have your most recent and up-to-date credit report on hand so that you can start to strategize about what moves you may need to make in response.
Pay Early, Pay Often
Nothing helps your credit score as much as paying off your debts on time. If you can’t pay off everything in full, then make sure to prioritize the ones that are nearing their limits, as these will alert the credit bureaus first.
Schedule Payment Reminders
Creating digital payment reminders is a great way to ensure that you never fall behind on your debts.
Get a Credit Card
Many people with less than perfect credit become terrified about having a credit card. According to this logic, by not having a credit card, they can’t do any further harm to their credit. Unfortunately, however, this misses the point. Because having a credit card – and managing it responsibly – is a natural way to rebuild poor credit. (Just make sure that your bank reports to the three major credit bureaus.)
Apply for an Installment Loan
When you show the credit bureaus that you can manage different kinds of credit, your credit score will reap the benefits.
Don’t Lower Your Credit Limit
Lowering your credit limit will decrease the gap between your available credit and balances; and will further hurt your credit score.
Avoid Any Late Payments
Late payments can drop your credit scores drastically – by as much as 100 points or more. Missed payments detrimentally affect good scores more severely than they do bad scores.
Know Your Limits
Most credit cards don’t tell you your credit limit unless you ask them. Make sure to find out your current limit so that you never unknowingly exceed it.
Keepin’ it Old School
Always try to keep your old credit cards active. The key is to use them infrequently and pay them off on time and in full. Otherwise, your issuing bank may close it or stop updating the credit bureaus – thereby undermining the positive work that you did to help bolster your credit.
Dispute Unsettled Balance
Make sure you file a dispute for all your previously unsettled balances from other companies; and get those accounts cleared.
All told, it takes commitment to be responsible in managing your finances. You can’t improve your credit score in a snap. It is done over a period of time with consistency and vigilance.
Own a Credit Business?
If you own a credit business, there are tons of resources on the internet on how to generate qualified leads. Check out this article to learn more and see how you can optimize.