Are you having trouble with higher interest rates or getting a loan? You might need to work on your FICO Credit Score. Your credit score can affect you in more ways than you could ever imagine. Whether you are getting a new apartment, buying a house, or starting a business, your credit score will be a massive part of the screening process. Keeping up with your score is a very smart idea. Here are a few tips for managing it!
First, make sure you keep an eye on it. In 2020, identity theft is prominent and no joke. If individuals can get their hands on your information, they can sign up for loans, credit cards, and payment programs and, more than likely, not pay them, thereby running your credit into the ground. Make it a priority to check your credit score regularly to ensure this hasn't happened. It is much easier to deal with if it is detected sooner rather than later.
Most importantly, pay your bills on time. If payments are not made on time, collections can severely affect your credit score. It is currently so easy to set reminders through your financial institution or set up automatic payments that allow you to build your credit without much effort. Missed a payment? Do your best to get current. There are many debt counseling programs that can help you manage a difficult situation. At P1FCU, we partner with Greenpath Financial Wellness and love helping our members achieve financial success.
Reduce your total debt. The amount of debt you have compared to your available credit can make the difference between a 600 and a 750 credit score. Lowering your debt can be a much easier way to manage your score rather than your payment history. When doing this, make sure you pay off higher-interest-rate debt, such as credit card debt. Paying less interest will allow you to put more money towards the principle enabling you to pay it off quicker.
In summary, establishing and maintaining your credit score can be very challenging. Establishing a credit score can be a huge step; you may need to open a line of credit even though it is not necessary to prove you can pay. The key to maintaining that credit score is keeping up with it, making your monthly payments, and continuing to reduce your total debt. Have that score in the right spot? Come in and see us at P1FCU, and we will help you reach your goals!
This is for educational purposes only and not financial advice.
