Are you about to make a major financial purchase such as a car or home? The higher your credit score, the lower the interest rate lenders will offer you. A lower interest rate will mean lower monthly payments and less interest aid over the life of the loan. Beyond seeking to borrow money, your credit score is being increasingly used to make character judgements. Many employers are pulling credit ratings prior to offering jobs to prospective employees. There are growing reasons to maintain a high credit score. Follow these recommendations from the experts for improving your credit score and keeping it high.
The goal for a strong credit score should be to keep it well above 800. The number one way to do this is to pay all bills before they are due. Late payments are dings on your credit report that take over a year to disappear. If you have store credit cards from some of your favorite stores such as Madewell, that’s perfectly accepted for maintaining a strong credit score provided you pay the minimum payment before it’ due. The second factor used in factoring credit scores is the percentage of available credit you’ve used. For example, if you have a credit line of $1000 at a given store and have an outstanding balance of $500, you’ve used 50% of your available credit. Keep track of each of your credit lines for car loans, credit cards and store charge cards. Commit to keeping your outstanding credit balances below 50% of the amount of credit you’ve been granted.
Follow these tips and you’ll be well on your way to establishing a strong credit score. Your efforts will pay off in the form of lower monthly payments and more credit opportunities. Never forget that the best way to pay for every purchase is with cash. Make the payments to credit cards the same day they are charged if you’re only using them to build miles or points.