How to Improve Your Credit Score
If the thought of improving your credit score seems daunting, don’t fret! It might take some time to build your credit back up, but with setting goals and being persistent there will be progress. Below are some ways to help you get on track to get approved for credit cards, loans and to receive favorable rates.
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Review Your Credit Report
Check on your credit report to make sure you know where you stand with your credit and that there are no mistakes. If there are mistakes it will reflect negatively on your score. Thankfully you have the ability to dispute the discrepancies through My Credit Score, as well as review your credit report.
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Identify What Needs Improvement
If your credit is not quite where you would like it to be after making sure there are no discrepancies, evaluate how the score can be improved. Take note of your payment history, amount of debt, age of accounts, account mix and credit application history. Then create an action plan to make the necessary improvements.
Here are the general credit tiers:
Excellent Credit: 750+
Good Credit: 700 – 749
Fair Credit: 650 – 699
Poor Credit: 600 – 649
Bad Credit: below 600
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Pay on Time
Even if you have made late payments in the past, you can turn it around by staying on top of your due dates going forward. Making changes to your payment due dates could help to get you more in line with your paycheck schedule. Setting up payment reminders could also help with staying on track. “Paying your bills on time can raise your score within a few months.”
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Keep Balances Low
The debt-to-credit ratio is an important component in determining your credit score. The rule of thumb is to keep your credit card balances below 30% of the card’s credit limit. Try not to close unused credit cards, which can negatively affect your “utilization ratio percentage”.
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Open a Secured Credit Card
If you have never had a credit card or are in fair, good or excellent standing, opening a secured credit card could be a good option to build credit. Just make sure to follow the advice above!
Meritus CU offers a credit score solution through My Credit Score. This solution is free and offers a credit report review, ability to claim any discrepancies, recommendations for pre-qualified loans, tips on strengthening your credit and more!
Learn about My Credit Score benefits here!
*Credit score from My Credit Score is based on a soft pull of your credit and will not penalize you for review. Please note, this information is provided as a general guide of your approximate score and tips on how to improve. The number pulled by your consultant may vary from your estimated score due to additional information provided by the three credit bureaus with a loan inquiry.
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