Credit scores and you – the uphill battle
It’s kind of insane how important credit scores have become.
Your score reflects your history of managing debt. If it’s too low, you may not be approved for a loan or mortgage. If you’re approved, you might get less favorable terms than someone with a higher score, and in some cases, it might even prevent you from getting a job!
Never had a credit card? You might think, “My credit score must be perfect because I have never had a chance to lower it!”
Guess again. No credit history at all can be just as bad as a low score!
The long and short of it? Build up your credit score and keep it on the straight and narrow.
How, you might ask? Well, you can boost a low score in many ways, but it will take time to establish your creditworthiness.
- Monitor Your Credit Report: Confirm the accuracy of your credit report at least once a year. Sometimes, there can be errors or out-of-date information that can hurt your score.
- Pay Your Bills On Time: A great way to kill your credit scores is to make late payments consistently. Pay all of your bills on time, in full. Need a little helping hand? Bill reminders have come a long way and can help you get that payment out before it’s due or set up automatic payments.
- Reduce Debt: Owing money to a creditor (be it phone provider, loan, credit card, etc.) can and will negatively affect your credit. High debt levels can significantly lower your credit score, so try to reduce it whenever possible by paying down the balance on existing accounts or transferring balances to a low-percentage interest rate card.
- Keep Accounts Open: Remember, the point of your credit score is to prove your credit history over the long term. Closing old accounts can negatively impact your credit score, so be selective.
- Limit New Credit Applications: Opening new accounts too frequently can signal instability and cause a temporary dip in your credit score, so avoid applying for any new lines of credit without considering the potential consequences first.
Building and rebuilding credit, while time-consuming, is worth the effort, and ‘future you’ will thank ‘current you’ for keeping it under control when you apply for that loan down the road.
That’s the future-proofing we like to see!
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