If you’re hoping to get approved for a mortgage or loan with a great interest rate, or if you want to make sure you always get approved for the best rewards credit cards, you’ll need to have a good credit score.
Your credit score is determined by several factors, including your payment history, how much you owe, and the length of your credit history. While there’s no easy fix for a low credit score, there are steps you can take to start improving your score today. To help you out, we’ve prepared a list of tips we recommend you keep in mind:
This one sounds fairly obvious, but it could be a little more challenging than you think. A good relationship with your bank is similar to a good relationship with your best friend: You don’t want to take them for granted, and you want to be honest and direct about what you need from them.
It might be wise to open a personal checking account with a bank that offers great personal loans. Checking accounts are relatively low-risk for your bank, so you might be able to get the interest rate you really want, even if your credit is less-than-perfect.
The number-one factor in your credit score is your payment history, so don’t make the mistake of skipping your payments, even if the due date falls at a particularly inconvenient time. If you have to pay a little extra, do it to ensure that you’ll have a good credit score in the future.
Sometimes the problem with your credit score is not that you don’t pay your bills on time but that you don’t know that you’re being reported to the credit bureaus. To make sure this isn’t the case, pull a free copy of your credit report with each of the major credit bureaus.
If you find information on your credit report that is inaccurate, you should contact the credit reporting agency and ask them to correct the information.
If you’re planning on applying for a mortgage, a credit card, or another loan, it’s important to demonstrate stability within your financial situation. A mortgage lender, for example, will want to see that you’ve been in the same job for at least two years. If you’ve just started your first year, you might need to wait a while before you can qualify for a mortgage, but at least you’ll know what you’ll need to do before you apply.
If your credit is less than perfect, you may also want to consider putting some savings aside in a CD or a money market account that you can use for your future loan. The lender will want to see that you have some money that you can afford to put at risk.
Hopefully, you now have a better understanding of what your credit score means, how you can improve your credit score, and how you can make sure you always qualify for the best financial products. As with any important financial decision, it’s a good idea to make sure you have a solid plan in place before you make a move.
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