how to build a healthy credit score

5 Ways to Build a Healthy Credit Score

You’ve probably heard about checking your credit score before, and usually, you’re told you need to it in order to get a big loan such as a mortgage, car loan, or business loan. At this stage of life, you probably don’t need to worry about those things quite yet. But credit score also affects your auto insurance premiums, your approval for renting an apartment, and even your chances of getting a job. Fixing your credit score is really not a hard thing to do if you keep in mind these five easy tips.

Check Your Credit Report And Have Errors Removed

If you go to Annual Credit Report, you can request one free copy of your credit report from Equifax, Transunion, and Experian. You might be surprised at what you find, and even a small error fixed could boost your score immediately. Since it costs nothing to do this, this tip is a must.

Keep Your Credit Card Balance Low

Sometimes you hear tips to avoid using credit cards at all costs and stick to cash. That’s not good advice because you need to use credit in order to build it. But if you avoid running up a balance on your credit card and always keep it paid, your score will be kept good. CrediReady recommends that consumers should use only 30% of their available credit. A lot of this has to do with the compounding nature of loan credit. As reported by Elevate Mortgage Group, many mortgage interest rates increase drastically with an adjustment of as little as 4 percent interest. And credit card rates tend to be a lot higher than that.

Get A Credit Limit Increase

While you don’t want to use all of your credit card balance, getting a higher limit will keep your score up since it improves your credit utilization. Your credit utilization is the percentage of credit you use of your credit line. The lower that is, the better your credit score will be.

Don’t Apply For Too Much New Credit All At Once

As Bankrate mentions, you don’t want to make multiple credit applications in too short a time because the credit bureaus are watching. As they mention, applications for certain loans like student loans are not counted against your score. But still, you want to make sure not too many hard inquiries are made on your report.

Pay Other Bills On Time

Even if certain bills paid are not credit card bills, they could still make their way over to your report. This is especially true if you get delinquent on a certain bill and a collections agency is brought in or an asset such as a vehicle is repossessed. No matter who you’re paying, always make a way to pay them on time and if you can’t, then negotiate the debt.

When you take the right precautions, it’s not hard to build a healthy credit score. However, it is hard to build one back up after your credit score has decreased. As they say, the best solution is prevention.

If this helped you out, be sure to check out similar lifestyle points here!

Christian Z

Editorial Staff at DAPULSE

Christian Z


Follow Us

Don't be shy, get in touch. We love meeting interesting people!