Whether you are a young professional applying for your first credit card, a newly married couple shopping for your first home or a recent retiree trying to reduce debt and optimize your finances, you have a lardot riding on your credit score. That three-digit credit score will have an impact on every part of your financial life, from your ability to buy a home and qualify for credit to how much you pay to service your existing debt.
If your credit score could use a boost, it is important to make a plan and implement a strategy. Your credit score is not set in stone, and with a few simple adjustments, you can boost your score and get a handle on your finances. Here are some tips to get you started.
Put Your Bill Payments on Automatic
Paying your bills on time is the number one thing you can do to improve your credit score, and you cannot afford to let anything to chance. A single missed deadline or late payment could undo months of hard work, so fight back by putting your bills on automatic.
Setting your bill payments up ahead of time can help ensure all your payments are made on time, so you have one less thing to worry about. You will need to monitor your bank account closely and check the balances on your bills, but the automatic payment strategy can keep your credit score on an upward trajectory.
Pay Down Your Existing Debt
The amount of debt outstanding plays a big role in your credit score, so do what you can to pay down your existing balances. Start by adding up what you owe, then check the interest rate on each card. Tackling the highest interest rate balances first will give you the biggest bang for your buck, and you can work your way through those debts one at a time.
If you use this strategy and consistently pay off your debt, you should see your credit score go up accordingly. Be sure to monitor your score on a regular basis to make sure your debt repayment plan is working.
Reward Yourself with a Credit Card
When used properly, a credit card can help you improve your score – and give you some serious rewards. If you do not already have one, apply for a credit card that gives you the rewards you value most.
From airline miles to gift certificates to cold hard cash, there are plenty of credit card rewards out there. Just choose the one that best suits your needs, then spend wisely and pay off your balance in full each month. You can use the bank’s money for free, build up your credit score and enhance your future finances.
Keep Your Eye on the Ball
When you are trying to rebuild your credit or boost your credit score, you cannot afford to leave anything to chance. It is important to review your credit file regularly while the rebuilding process is underway, so you optimize your efforts and make the most of your hard work.
You should check your credit score on a monthly basis, using free online tools – or your own credit card statement. Many credit card issuers now provide free credit scores to their cardholders, so tracking this information could be easier than you think.
Consumers are also entitled to a copy of their three credit reports on an annual basis. If you stagger those requests, you can review your credit profile every four months, so you can stay on top of things and keep moving forward. Improving your credit score is not always easy, but it is important. Once you have a plan in place, you can improve your credit score, enhance your finances and build for the future.