What Is A Credit Score?
Credit scores aren't just numbers. They are grades that credit reporting agencies share with you, creditors, and lenders. When you apply for any type of loan or credit card, your credit score shows if you are a risk or creditworthy. Even applying to lease an apartment or a home, the landlords want to know what your credit looks like, and will you be a risk paying your rent on time.
FICO® Scores have a range from 300-850. The higher the score, the lower the risk. The chart taken from the Experian website gives you a good idea of the score ranges.
You can pull your FREE report at creditkarma.com. It will show what you have outstanding, slow pays and good standings. This is an easy and free way to monitor your credit and see what you need to work on.
Tips To Get Your Credit Score Back On Track
Go into 2019 getting right with your creditors.
Sign up with creditKarma.com
Get easy access to your credit score and see what you need to work on.
Start paying your bills on time
If you have a history of paying your bills late, you need to turn that habit around and make sure they are paid on time. Sign up for online payments and automatic drafts. If a car note, credit card, or bank loan is 30+ days overdue, you can just about bet that it will be reported as a "slow pay" on your report. The good news is that when you start paying on time for several months, you'll start seeing results and improvement in your score.
Avoid opening new credit accounts
If you already owe a debt to credit card companies, don't go and open a new account. This is bad because first, it will probably show a "hard credit inquiry" which affects your score. Second, you are going to owe more debt. So stop it.
Avoid high credit card balances
Credit card reporting companies heavily penalize cardholders with high balances. Basically, you'll want to keep credit card balances at no more than 30% of your available credit. For instance, if you have a. credit card with $3000 available credit, you'll want to keep the debt balance at $1000 or lower.
Do not cancel credit cards
Having an available line of credit on a card with no balance always helps your credit score. Plus, it could come in handy for emergencies. However, if you absolutely cannot control your spending or if an annual fee is being charged for a card that's not used, there's actually a process to closing out a credit card so that it doesn't hurt your score.
Talk to a lender
If you are wanting to purchase a home and need help working on building your credit, some mortgage lenders can give great advice.
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