Credit scores. You know you have one. You know it’s important-ish, right? But do you know how to unlock the great mystery of improving it? Raising your credit score can mean a mighty financial power -- and we’re talking the awesome, money-growing kind. Here are three easy steps to get there.
1. Keep a Positive Payment History
Let this knowledge nugget sink in: your payment history makes up a whopping 35% of your credit score! In other words, when pay your bills on time, your credit score gradually increases as a result. Financial institutions can more easily lend money to folks who show a positive history of paying their bills. So, be a glass half full person and keep that history positive.
2. Watch Your Balancing Act
Credit scores also factor in the way you balance your existing credit, such as how much money you’ve charged to your credit card and so how long that revolving debt stays there. In fact, your “owed balance” makes up 30% of your credit score! THIRTY-PERCENT! Simply put, by paying down your credit card balances, you can increase your credit score. It's that simple.
3. Use It, Don't Abuse It
We know, it's rather cliché, but in reality, it's the truth. 15% of your credit score is based on the length of your credit history – so essentially, you need to use credit and establish a history of this use in order to raise your score for the future. Worried that your score isn’t the greatest right now? Don’t feel like you need to suffer with a high interest rate in order to build a credit history. Credit unions, for example, have options for you to build your credit usage in an affordable way. Just make sure you continue to demonstrate a positive payment history!
Now that you have tricks in hand to improve your credit score,
you’ll need a way to monitor your progress.
Credit Union 1 has you covered with our FREE credit score alerts!
Login to Online Access, click Credit Score, and start tracking your score today.