The Ins and Outs of Improving Your Credit

The Ins and Outs of Improving Your Credit
Knowing your credit score is an incredibly important part of your financial history. It’ll help you throughout many different aspects of your life like applying for a mortgage, buying a car, or obtaining a credit card. 

If you aren’t too familiar about what a credit score is, it’s a measure of how dependable you are as a borrower. All the history of your loans (student, home, car, etc.) accumulates to create your credit score. 

All of these examples are a great way to start building credit. If there are inaccuracies or derogatory items on your credit then you may want to consider repairing your credit

Why You Should Know
Your credit score is what stands between you and making your next big life decision. If you know your credit score, you can be aware of ways to improve so it can be easier to obtain a loan in the future. 

You also can use that information to make better financial decisions in the future, whether you have great credit or not so great credit.

How to Improve

The best way to improve is knowing what aspects of your financial history go into your credit score, and incorporating them into your everyday life. Also, your credit report will tell you about the decisions that you’ve made throughout your financial history and you can realize how to do better in the future.

Make Payments on Time

A huge chunk (35%) of your credit score relies on your payment timeliness. Despite what your payment history may look like, each future on-time payment makes a positive effect on your credit score.

Keep Low Balances

A third of your balance is based on your debt to credit ratio. In turn, the lower the balance of your credit is the better. You may not be able to alter credit lines like mortgages, but credit cards can be easily maintained.

Keep Away From Hard Inquiries

Hard inquiries are initiated by creditors on your behalf. They range from credit card applications to car loan applications. Too many hard inquiries in a short amount of time can negatively affect your credit score.

Fix Inaccuracies

When you get your yearly credit report, be sure to check all of the info on it for any mistakes. If you find one, be sure to report it to all of the three credit reporting bureaus. Any mistake, no matter how small, can positively impact your credit score.

Don’t Close Old Accounts

Your credit history is important, and it’s a small portion of what your credit score is based on. When you see an old account, don’t close it. Instead, call up the company and try to renegotiate your rates. 

If you aren’t active on your accounts, companies may choose to close the accounts for you. Be aware of your available accounts and the money that you have available to you.
Diversify Your Credit
A great credit score is backed by a balance of different lines of credit. Investing in yourself is always a good decision, for example buying a home will help your credit tremendously.

Just Wait it Out

Sometimes, the only thing that you can do it wait out bad marks. Bankruptcies won’t be counted against you seven to ten years after the date. Foreclosures take about seven years. The exception to this is if you are dealing with abusive collection agencies like Ad Astra Recovery Services then I’d suggest reaching out to an attorney or credit professional. 

Keeping your credit score in mind will give you a roadmap to follow on the journey to a brighter financial future. With a solid credit score under your belt, nothing will be able to get in your way.

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