Credit scores are the key to advancing in life. Home/Auto loans and even getting a job depend on the quality of your credit score.
It isn’t always easy keeping our credit score high. Accidents happen and we can’t always pay every bill on time. A few unpaid bills doesn’t have to mean you live a life with bad credit. These easy steps can help will boost your credit score instantly.
1. Begin Your Credit Life As Soon as Possible
The total length your account has been open can make up 25% of your credit score. You might be nervous giving a teenager a credit card. Teach them to use it responsibly and they will reap credit benefits throughout their life.
No matter your age, you should have a credit card open to put basic expenses on. Put a pack of gum on your credit card every month. The shop clerk may hate you, but it’s okay, you’re boosting your credit score with fresh breath to boot.
2. Pay Off all Your Bills In Full Every Month
Sounds simple in theory, but harder to practice. Credit card debt has a tendency to snowball if you don’t watch it. We advise only putting charges you can afford on your credit card.
This may mean cutting back on expenses. Think about what you need vs want. Money is supposed to buy freedom, not happiness. Food, insurance and utility bills are all fine for credit cards; new 70″ 4k televisions, not so much.
3. Check Your Credit Score Often and For Free
This is a tricky one. Many people hear that if you check your score too often it will bring it down. This is true, but only if you officially check your score.
Free, unofficial, credit score checkers allow you to view your score with any negative impact to your score. We recommend using Credit Karma to check your credit score. It’s free, safe, and will allow you to keep a watchful eye on your credit score.
4. Keep a Low Balance on Your Credit Card
Banks check how much your monthly balance is before they give you a loan or credit card. If you know you are about to apply for a loan wait until you can pay off most of the balance.
It might be wise to take out another credit card to put very small purchases on. Designate a credit card to only put bread and milk on, and pay off the balance in full.
5. Wait at least 6 Months Before Applying for a New Credit Card/Loan
Some people get a new credit card every month. Banks will give you negative marks if you do not wait at least 6 months before getting another line of credit.
You have rights as a consumer! Make sure to research all of your options before taking out another line of credit. Look for ways to reduce your overall expenses so you can pay off more principal than interest every month.