Healthy Credit Card Habits
February 12, 2019
Let’s face it: credit impacts all of our lives. Of course, good credit will impact you positively and bad credit negatively. Your credit score reflects the way you use credit and helps lenders determine whether or not you are able to repay the loan based on your past financial performance. With a higher score, you may qualify for better interest rates, higher credit limits, and more types of credit than you would with a lower score. While there are no quick fixes to getting a good score, you can raise your score over time by demonstrating that you consistently manage your credit responsibly.
Here are 9 things you can do to improve your credit score.
1. Pay your bills on time. If you have a history of paying your bills on time, you’ll have an easier time getting a mortgage loan, car loan or credit cards. Even if you’ve had serious delinquencies in the past, a recent history (24 months) of on-time payments carries weight in credit decisions.
2. Keep credit card balances low. High outstanding debt can pull your score down.
3. Check your credit report for accuracy. Inaccurate information on your credit report can be cleared up by contacting the original creditor and your credit bureau(s).
4. Pay your debt down. The most effective way to improve your credit is by paying down the amount you currently owe.
5. Use credit cards – but manage them responsibly. In general, having credit cards and installment loans that are paid on time can raise your score. Someone without credit cards tends to have a lower score than someone who has already proven that he/she can manage credit cards responsibly.
6. Don’t open multiple accounts too quickly if you have a short credit history. New accounts may lower the average age of your existing accounts which is something your credit score also considers.
7. Don’t close an account to remove it from your record. A closed account will still show up on your credit report. In fact, closing accounts can sometimes hurt your score unless you also pay down your debt at the same time.
8. Don’t open new credit card accounts you don’t need. This approach could backfire and actually lower your score.
9. Contact your creditors or see a credit counselor if you’re having financial difficulties. This won’t raise your score immediately, but the sooner you begin managing your credit well and making timely payments, the sooner your score will improve.
While these ideas may not create a dramatic improvement in your credit score overnight, over time they will. Remember, it takes time to develop a strong credit profile, but once you’ve done it, you’ll find it easier to apply for credit and start earning better interest rates.
Greater Iowa Credit Union has a credit card program that’s right for you! Start building your credit today. Click here to apply. We are always happy to help you reach your goals!
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