How to Manage Your Credit Score
A well-managed credit score will unlock the things you want, such as better interest rates, travel credit cards, and lower insurance premiums. In today's article, we will give you a few proven tips to manage your credit score.
Pay on Time
Late payment will significantly damage your credit score on mortgages and car payments. We recommend getting current and pay in advance of the due date. You can eliminate mailing delays by paying via electronic methods. If you pay by mail, we suggest making the payment 5-7 days before the due date. Irrespective of how you make the payments, it is always a great practice to pay on time.
Check Your Credit Errors
Generally, it takes a lot of time to remove errors from your credit record. The problem occurred when you had a debt put in a collection or have filed for bankruptcy. Therefore, regularly check your credit report for errors. Contact the authorities to remove the errors as soon as possible. Otherwise, you can get in trouble, mainly when you apply for a mortgage or car loan.
Keep your balance low
Carrying more than 50% balances of your credit limit on your account will lower your credit score. We recommend you to use several cards that will help you spread out the balance. Also, you can ask the creditor to increase the limit on your card.
Limit your credit inquiries
You must limit your credit inquiries from potential lenders because it can lower your score. It includes mortgage companies and department stores. For example, they offer you a 10% discount on your card. The same applies to unsolicited credit card offers that you receive in the mail.
Research loans in advance
Researching big loans in advance helps you manage your credit score adequately. You can ask a potential lender about a credit bureau they use to make decisions. Some lenders such as mortgage and auto prefer one credit bureau than others. Therefore, it is crucial to plan ahead of the purchase as it allows you to make corrections in the credit report. Thus, you can improve your credit score quickly.
Monitor your credit card spending
Tracking your credit card spending gives you a forecast of the upcoming monthly bill. There are different ways to track your credit card spending, such as a simple paper, Excel spreadsheet, or any money management app.
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Also, we recommend tracking recent charge card activities directly on the website of the issuer. The objective is to analyze and know if there are any errors and correct them accordingly.
Remember, credit cards are a tool and you to manage them carefully. It means being cautious about how and when you use your cards as well as prioritize to pay them off fast.
Successfully managing your credit score will help lenders quickly approve your mortgage or loan application. Scores range from 300 to 850 points based on payment history and financial records. Late payments can significantly lower your credit score. Follow the steps given above to manage your credit and improve your score adequately.
|Thomas Moore is a proud American with a Bachelors Degree in Business Administration from the University of San Diego. He has been in the financial industry since 2007 holding numerous licenses in multiple states. He currently helps operate cashkingco.com and our resident expert on all things finance. LinkedIn Profile|