If you’re ever in the market to get a mortgage, personal loan, car lease, or even a potential employer tying to hire you for your next job, you need to have a great credit score. Any less than perfect and you are looking at paying more in interest, which means you are throwing your budget out of whack, which could potentially end up you paying more in interest, essentially throwing money down the drain. In order to have the best credit score you need to have a solid payment history, low debt compared to your available credit, and not have too many inquiries which could lower your credit score and show lenders that you are responsible with the credit limit given. These days you can check your credit report by requesting a copy of your credit report free at least once a year by the three major credit bureaus, but will not give your credit score. You can see your credit score by looking at your online credit card statement balance, either online or by mail, and will actually show you your FICO score, so you can monitor to see how it changes monthly. Keep in mind that scores are sent to the credit bureaus typically a month behind so any action that you have done will probably take a month or two to catch up to what is actually reported when you see it.
Always Check Credit Score
Given the fact that you can review your full credit report at least once a year by the three major credit bureaus you can request a copy once a year so you can review the full report. If you are looking for the credit score, you can review the score on the monthly credit card statement, whether you have online or mailed copies. By reviewing the sore at least, you know on a monthly basis whether or not the score had changed and if there is something to worry about, giving you notification that there is something to pull the full report to review.
Make On-Time Payments
A large portion of your credit score comes from a solid payment history, so it’s important to make your payments on time, by the due date. Late payments are reported to the credit bureaus when they are more than 30 days late, so seems to be plenty of time to make your payment by to make a hit. Unfortunately, if you make your payment even a day late you could be at risk of a late charge, or even worse if you carry a balance, an increase in your APR which could cost you plenty in extra interest.
Pay Down Debt
The next large portion of your credit score has to do with the amount of debt compared to the available credit that you have, so if you continue to charge up your account, just keep in mind that the closer you get to your credit ceiling that your score will decrease. There is nothing wrong with using a credit card for every purchase you make throughout the month, but just be sure that you can pay off the full balance by the next statement due date or you could be setting yourself up for possibly years of trying to get out of debt.
Don’t Close Zero Balance Accounts
If you have been in debt for years, by the time you finally have been responsible and finally paid off the balance your first instinct might be to close the account, so that you don’t give yourself the opportunity to go into debt again. Actually, by closing the account you could actually lower your credit score because it would take away from your available credit, so the best thing you can do is leave the account open and just cut up the card so you don’t use it again, leaving your account open with a zero balance and keeping your available credit.
Limit Credit Applications
There are so many credit cards on the market that you may be applying for virtually every offer that comes in the mail, but just know that every time you have your credit pulled that your score will dip a bit, so be sure that whenever you have your credit score pulled that you are serious about the application and approve the inquiry. You definitely do not want lenders to get the impression that you are looking to open a boat load of credit cards and charge up a fortune, even if that is no the intent.