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3 Rules for Boosting Your Credit Score


We should always be working to improve our personal credit scores.  Here are 3 rules that you can use to help you in this effort.

  1. Make your payments as soon as you get your bill.  Avoid waiting until the last minute.  if you push it to the due date, any little snag could cause you to be late - no internet access, ran out of stamps or got lost in the mail.  Making your payments on time is one of the main factors that determine your credit score.  A single missed payment can drag down your score, and the incident can stay on your record up to seven years.  late payments can also cost you extra in fees as well as trigger a higher interest rate.  Also try to pay more than the minimum required on your loans and credit cards each month.  You'll pay them off sooner and save a bundle on interest.
  2. Don't max out your credit cards.  Lenders look at how much available credit you actually use.  Keep your credit card use to less than 50% of your credit limits.  So if your card carries a $1,000 limit, try to keep your spending below $500.  Not only will this strategy help you to get the best possible rates, it can help you avoid getting in debt over you head.
  3. Don't carry a balance.  One of the biggest myths about credit is that you need to carry a balance month to month in order to build a history.  Not so.  In fact, credit scores don't even distinguish between those who carry a balance and those who don't.  Go ahead and use your credit card each month, but stick to smaller purchases you can afford to pay in full.  You'll save money on interest charges and you'll be less likely to get into trouble down the road.

When it comes to building your credit, a little discipline can go a long way.


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