Which number would you rather reveal to a friend: how much you weigh or your credit score? A 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 ways to raise your number.
What’s a credit score?
Your credit score is a calculation that signals to potential creditors how well you use credit and how likely you are to repay your debts. Essentially, it indicates if you’re a good credit risk. Scores fall between 300 and 850. Your credit union or bank may provide 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.
How to boost your credit score
Verify your credit report information. The three major credit-reporting bureaus — TransUnion, Equifax and Experian — each allow you one free copy of your report 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 three months. Always examine the file to ensure the information is up to date and correct. Follow the process provided by the credit bureaus to 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 your credit score.
Keep low balances on credit accounts. Charge only what you can afford to pay back in full each month.
Pay off debt. Look for ways to refinance or consolidate debt. This may result in reducing the total interest paid over time and a faster principal pay off.
Keep zero balance credit cards open. Closing old accounts could potentially lower your score. The length of your credit history is factored into determining your credit score. A longer credit history typically provides a boost in your credit score.
You may not want to reveal your age, weight or credit score. But you’ll smile on the inside knowing one number is higher than the others.
Article provided by Local Government Federal Credit Union.
The advice provided is for informational purposes only. Contact a financial advisor for additional guidance.