Every single person needs good credit score.
A perfect score is 850. At this moment my credit score is 809. It was not always this high, in fact it was terrible, because I was not good with money.
But I worked hard and educated myself about money and it slowly improved.
You may not use credit cards or have any debt of any kind, but it is still a good idea to have good credit. Because you may need a loan someday.
For a car or house or health emergency.
Having a great credit score will get you the best terms possible on a loan. And this will allow you to save money and build wealth over time.
There are 3 Credit reporting agencies
Each one these companies has a different criteria for judging you. It may not be fair, but it is the way it is.
You can get a free report from each of these companies every single year.
It is a good idea to check your credit score each year to make sure there are no incorrect charges or any fraud happening under your name.
Where to start
Start by finding out what your credit score is. You cannot bury your head in the sand and pretend that it does not exist, because it is not ignoring you. Face the music and find out where you stand. This will give a baseline of how to move forward.
It takes time to improve a credit score. There is no magic bullet or special company that can fix your credit.
There are businesses that say they can help you and they can! They primarily act as an accountability partner for you. You can do everything on your own if you choose to.
Some factors that impact your score
- Your credit utilization
- Length of credit history
- Different types of credit
- On time payments
3 things you can do to increase your score starting today
1. Increase your credit limit – Call your credit cards and ask them if they will raise your credit limit. This will improve your credit utilization. If you credit provider will not increase your credit limit you can also open a new credit card with a higher limit. This will lower your score a few point in the beginning, but increase your score over the long run.
2. Pay down your debt – The more credit you have available at any give time the better.
3. Make on time payments – Never have a missed payment and if you do miss a deadline call your credit provider and ask if they will take that charge off your credit history. You do not want a creditor putting information on your credit report.
A few more things
1. Do not close old credit cards. You want to have a really long history of have access to credit.
2. Different types of credit help. A car/home loan vs. credit cards. Creditors like seeing a mix.
Just because your credit is not good today does not mean you screwed. There are always different options to explore.
Here are also a few places you can go to check and keep track of your credit score and your progress:
Be persistent with your improvements. If you have debt or creditors find time to call them and see if they will work for you.
There are so many benefits to having a great credit score. Anyone can improve their credit score and get over an 800point score will a little work and little time.
For more in depth info like this and in-depth analysis check out the Harness Money Newsletter.