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, and here are a few tips for managing it!
First of all, 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, payment programs, and more than likely not pay them, therefore running your credit into the ground. Make it a priority to check your credit score often to make sure that this hasn't taken place. 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 multiple debt counseling programs out there that can help you manage the difficult situation. At P1FCU, we partner with Greenpath Financial Wellness, and we love to help our members achieve financial success.
Reduce your total debt. The amount of debt you are currently in 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 like credit cards. 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're able to pay. The key to maintaining that credit score is keeping up with it, making your monthly payments, and continuing to lower your total amount of debt. Have that score in the right spot? Come in and see us at P1FCU, and we will help you reach your goals!