5 Tips That Will Help Your Credit Score in the Capital Region
Your credit score is instrumental when you’re trying to buy a Capital Region home. The number indicates to financial lenders just how reliable you are. If your credit score is good, the banks will be able to trust you to pay back the loan. If it’s low, you may see higher interest rates and steeper penalties for late payments.
Need to help your credit score in Capital Region? Here are a few tips that will help boost that score.
Keep old accounts open.
The older an account, the more reliable it becomes. A longer credit history shows trustworthiness, so those accounts that have been open for 15 years show lenders that you have longevity. If you close that account, you’re essentially cutting your credit score history by 15 years.
If you have accounts that you no longer need, make a point to make short monthly purchases and then pay off the balance immediately.
Keep your balances low.
Easier said than done of course, but keeping low balances make it easier to pay off your credit card bill each month. Even if you have a $3,500 credit limit, you shouldn’t be spending most of it each month. By keeping your bills low, your credit score will remain fairly high because you’re not spending more of the bank’s money than you can really afford.
Most lenders recommend keeping your spending at 30 percent or below the card’s lending limit. Of course, there may be instances where you need to spend more, such as to pay for a car repair, but if you try to keep those spending habits in check, your credit score will thank you.
Pay everything on time.
Late payments affect your credit score, whether it’s a payment on a credit card bill or even an electric bill. Making payments on time is perhaps one of the easiest things to keep your credit score high, and it’s one of the best, accounting for about 35 percent of your overall credit score. Missed payments will show lenders that you can’t always be trusted to make payments when they’re owed.
If you often forget to pay bills on time, start setting up alarms on your phone to remind you to pay off these bills.
Don’t spread yourself thin.
Some people like to make small purchases on all their cards, but this can lead to disaster. They might forget to pay a balance, and using so much credit on multiple cards show a balance can negatively impact your credit score.
To help yourself, use just one or two credit cards with the best terms. You’ll have less to worry about when it comes time to pay.
Use free credit reports.
Nowadays, more and more companies are helping people keep track of their financials through free credit reports. These reports tell you what your credit score is and provide you with tools to see how your future actions can affect your score.
Credit reports can also be good indicators of identity theft. If someone has been taking out more credit cards in your name or applying for car loans, that action will reflect in your credit score. You’ll have a better chance of stopping an identity thief if you check you score somewhat regularly.
When you have a strong credit score, more lending doors will open for you. If you’re planning on buying a house, take the time to dig into your credit history, giving yourself the chance to improve your credit score where necessary.