Credit plays an essential role in everyday life, affecting one’s ability to buy a car, secure housing, access utilities, get a cellphone, and even obtain employment. It can also, in many cases, cause you to pay higher rates for insurance, credit cards, and loans. If your score has room for improvement, here are a few tips for giving it a boost.
How to Raise Your Credit Score
1. Check Your Credit Report – www.freecreditreport.com
First, know where you currently stand. This involves carefully reviewing your credit report and making sure there aren’t any errors. Incorrect entries, such as missing or late payments, can have a big negative impact. If there is anything amiss, dispute it with the credit bureau and ask for it to be fixed.
2. Pay Bills on Time
Payment history is one of the largest contributing factors to a person’s credit score. Paying a bill late—even just one time—can have a considerable effect. For this reason, make sure all your financial obligations are paid on time every month. If you have trouble remembering deadlines, set up reminder notifications or enroll in automatic payments through your credit union.
3. Consider Taking Out a Loan
While it might seem counter-productive, you may find a loan at Estacado with a lower interest rate than what you’re currently paying, it may make sense to obtain one to pay off some of the balance on your credit cards. Securing your loan with collateral, such as your title to your vehicle, can lower the interest rate charged compared to unsecured loans.
You can also switch from a high variable-rate bank credit card to a lower fixed rate Visa through Estacado, which has no annual fees. Keeping you credit card balance down also improves your credit score too.
Additionally, 10% of your credit score is determined by how “diverse” your debt is—how spread out it is among different sources. Therefore, as long as the total is the same, this move can give your FICO® score a boost. Lastly, if you are able to make payments to this loan on time, it will improve your overall payment history and, therefore, your credit reputation.
4. Get Credit Counseling or Educate Yourself!
Those who are having trouble managing their debts should talk to a financial professional, who can provide you with budgeting strategies to help regulate your spending habits. Be wary of any who want you to stop making payments or ask for all your money up front.
You can educate yourself on more ways to elevate your score and develop a better credit profile. Remember to keep in communication with your lenders and continue to make payments on all debts each month.
Interested in exploring your loan options or receiving credit report counseling? Contact Estacado Federal Credit Union. They have been helping members access favorable loan rates and terms since 1953. Residents throughout Lea County, NM, and the Texas counties of Yoakum, Gaines, and Cochran are eligible to join the credit union and take advantage of all the financial services it has to offer. Call (575) 393-1596 to schedule an appointment or visit them online to start the loan application process.