Improve your Credit Score

Do you know what your credit score is? Or how you can improve your credit score?

Today people understand less and less about their credit score, especially those of you aged 18 to 34. Having a solid credit history is an extremely valuable asset, even more so if you are between the ages of 18 and 34, since you might be buying your first car or even your first home!

When looking into your credit score make sure you differentiate between your credit report and your credit score. Your credit report will show your history of using credit, such as your payment history, opened and closed accounts, and your credit limits.

The credit score will show you the current score that you have. The main type of score that you want to receive is your FICO credit score. FICO credit scores generally range from a low of 300 and a high of 850. The national average for credit scores is 692, and most credit bureaus say the ideal credit score is 700 and above. This is the score that will get you in the door!

Here are 5 easy tips you can follow to improve your credit score:

Pay on time: Now that you have a credit card or a loan, it is very important to make your monthly payments on time. This will not only help your credit score it will also save you money by paying less interest in the long term, even if you are not paying off the whole balance at one time.

Lightly use your credit card: The bigger the balance the lower your score. Even though you may be paying off your large balance on time, each month the credit bureaus will still see that you’re maxing out your card or getting close to your credit limit, which will actually hurt your credit score. Try to use around 30 percent of your current credit limit to keep that credit score high! If this continues to be a problem try asking for a higher credit limit.

Check your credit report: Make it a habit to set up an alert or write it on your calendar to check your credit report once every four months. This will help you keep track of your credit while also making sure that the report is accurate. You can receive a free report from each of the three credit bureaus once a year. So get a free report every four months from one of the three bureaus, this will keep you up to date on your credit.

Don’t close credit card accounts: The longer you have credit lines, the more it will improve your score. When you close those old credit card accounts it might hurt your credit score because it would be getting rid of your long line of credit. Even if you don’t want to use the old card it is still more beneficial, in most cases, to keep the account open. So just keep the card stored somewhere safe!

Dispute errors and old negatives: When you dispute errors or old negatives on your account, the credit bureau must investigate your valid claims and remove any inaccurate information. The result of the removal of inaccurate information and negatives would help you obtain a higher credit score.

So next time you are worried about your credit score remember these few tips to follow! And soon you’ll have that higher credit score that you did not think was possible!