Which number would you rather reveal to a friend: how much you weigh or your credit score? A recent survey from the National Foundation for Credit Counseling found that people would be more embarrassed to admit their credit scores than reveal their age or weight. Just like erasing those laugh lines, boosting your credit score takes time and commitment. Here are five simple ways to raise your number.
What’s a credit score?
Your credit score is a calculation based on your credit report. It signals to potential creditors whether or not you’re a good credit risk. Scores fall between 300 and 850. Your credit union or bank may offer your score at no cost on your account statement or online if you have a loan with them. Your credit card issuer may offer your score for free simply because you’re a customer.
Steps to boost your credit score
- Verify your credit report information. The three major credit-reporting bureaus — TransUnion, Equifax and Experian — allow you one free copy per year. You can also get one free copy per year by visiting AnnualCreditReport.com. It’s best to monitor your credit history throughout the year. Order a report from one of the different credit bureaus every four months. Always examine the file to ensure the information is up to date and correct. Fix any mistakes that could be weighing down your score.
- Pay your bills on time. Late payments and collections can have a negative impact on a credit score.
- Keep low balances on credit accounts. Charge or borrow only what you can afford to pay back in full each month.
- Pay off debt. Look for ways to refinance or consolidate debt if it can result in lower total interest paid over time and faster principal pay off.
- Keep zero balance credit cards open. Closing old accounts could potentially lower your score. Credit bureaus may give you a higher rating if you have access to more credit.
Article provided by Local Government Federal Credit Union.
The advice provided is for informational purposes only. Contact a financial advisor for additional guidance.