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Building A Good Credit Score: 5 Tips

Building A Good Credit Score: 5 Tips

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    Having a solid credit score has been important for quite a while now, but it’s actually becoming more important these days as lending tightens up. There’s a reason that the Fair Isaac Corporation — the organization that calculates the credit score that most major lenders rely on — has been changing the way that credit scores are calculated. All of these circumstances add up to the fact that even someone who is confident that their credit score is good should be making sure it stays that way. There are some relatively simple steps, though, that you can take to help yourself build up your credit score, as well as maintain it.

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    1. Get A Copy of Your Credit Report

    Although you can’t get your exact credit score for free, you can get a free copy of your credit report from each of the three credit bureaus (Experian, Equifax and TransUnion) once each year. To do so, visit AnnualCreditReport.com and request a report. AnnualCreditReport.com, by the way, is actually the only way to get your reports for free — the site was created in response to federal legislation requiring that the three national credit reporting companies inform consumers about their status. Despite their catchy commercials, companies like FreeCreditReport.com actually wind up charging you for expenses related to obtaining your credit report.

    2. Make Sure You’re Aware of Any Existing Accounts

    Typically, your credit report will show any accounts you have open — although different companies report to different credit bureaus, and some companies don’t seem to report at all. It’s easy to forget about credit accounts that you don’t actually use, like credit cards you stopped using but chose not to close the account ‘just in case.’ These credit accounts can easily represent the most likely upcoming dings to your credit: card companies and other lenders have started closing inactive accounts in order to limit their liability. As the amount of credit a person has goes down, so does their credit score. I’m not suggesting that you should start charging items to those inactive accounts, though — instead, it’s enough to be aware of them so that if your accounts do close, you won’t be taken by surprise.

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    3. Set Up Automatic Payments

    One of the easiest credit score factors you can control is how good you are about making payments on your current balances. Even if you don’t usually carry a balance, making a payment or two late can cause a preventable dip in your credit score. A simple slip up, like forgetting to send a payment, can have some major consequences. While FICO scores will be offering more leniency for someone who misses only one payment, automatic payments can be a simple way of avoiding even one late payment and any problem at all. Late and missed payments can have ripple affects beyond your actual credit score as well — in some cases, including credit cards, a missed payment on one account can lead to a higher interest rate on another account.

    4. Get Serious About Your Balances

    One of the factors in a good credit score is how much credit you have available. That means that reducing your current balances has a direct connection to helping your credit score. That doesn’t mean that you have to pay off your entire balance immediately to improve your credit score, though: while it’s a good overall goal, just adding a few dollars to your minimum monthly payment is enough to at least get you started on an upwards trend. Moving around debt, say to a zero-interest credit card, doesn’t actually help with your overall credit score. While it may make the amount easier to pay off, it can be reflected in your credit score as an inability to manage your existing credit.

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    5. Keep Your Number of Cards Constant

    While your available credit is a key factor in your credit score, opening a bunch of new credit cards just to increase the amount of credit you have available won’t really help. Instead, the system used to determine credit scores reads such a move as a need for more credit: if you open several cards in a short time span, credit reporting agencies assume that you plan to use that credit and might even be planning to get yourself into some trouble with it. Closing unused credit cards can also have a negative impact on your credit, so keeping your number of cards constant is usually the best compromise between getting the best credit card options and maintaining your good credit score. Your account age can also play into things, by the way. That first credit card you ever got, with its awful interest rate, may be an important part of your credit score. Think carefully before closing such an account.

    Your Credit Score and You

    Despite many ads to the contrary, there is really no way to fix your credit score in a hurry. The Fair Isaac Corporation works hard to make sure that credit scores indicate how you use credit over time, and the company knows what it’s doing. That means that you have to work on maintaining a good credit score long before you want to make a big purchase, like a house or a car. Since it’s not always predictable exactly when a person is going make those large purchases, it makes sense to make a good credit score an ongoing priority.

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    Last Updated on November 18, 2020

    15 Tips to Restart the Exercise Habit (and How to Keep It)

    15 Tips to Restart the Exercise Habit (and How to Keep It)

    It’s okay, you can finally admit it. It’s been two months since you’ve seen the inside of the gym. Getting sick, family crisis, overtime at work and school papers that needed to get finished all kept you for exercising. Now, the question is: how do you start again?
    Once you have an exercise habit, it becomes automatic. You just go to the gym, there is no force involved. But after a month, two months or possibly a year off, it can be hard to get started again. Here are some tips to climb back on that treadmill after you’ve fallen off.

    1. Don’t Break the Habit – The easiest way to keep things going is simply not to stop. Avoid long breaks in exercising or rebuilding the habit will take some effort. This may be advice a little too late for some people. But if you have an exercise habit going, don’t drop it at the first sign of trouble.
    2. Reward Showing Up – Woody Allen once said that, “Half of life is showing up.” I’d argue that 90% of making a habit is just making the effort to get there. You can worry about your weight, amount of laps you run or the amount you can bench press later.
    3. Commit for Thirty Days – Make a commitment to go every day (even just for 20 minutes) for one month. This will solidify the exercise habit. By making a commitment you also take pressure off yourself in the first weeks back of deciding whether to go.
    4. Make it Fun – If you don’t enjoy yourself at the gym, it is going to be hard to keep it a habit. There are thousands of ways you can move your body and exercise, so don’t give up if you’ve decided lifting weights or doing crunches isn’t for you. Many large fitness centers will offer a range of programs that can suit your tastes.
    5. Schedule During Quiet Hours – Don’t put exercise time in a place where it will easily be pushed aside by something more important. Right after work or first thing in the morning are often good places to put it. Lunch-hour workouts might be too easy to skip if work demands start mounting.
    6. Get a Buddy – Grab a friend to join you. Having a social aspect to exercising can boost your commitment to the exercise habit.
    7. X Your Calendar – One person I know has the habit of drawing a red “X” through any day on the calendar he goes to the gym. The benefit of this is it quickly shows how long it has been since you’ve gone to the gym. Keeping a steady amount of X’s on your calendar is an easy way to motivate yourself.
    8. Enjoyment Before Effort – After you finish any work out, ask yourself what parts you enjoyed and what parts you did not. As a rule, the enjoyable aspects of your workout will get done and the rest will be avoided. By focusing on how you can make workouts more enjoyable, you can make sure you want to keep going to the gym.
    9. Create a Ritual – Your workout routine should become so ingrained that it becomes a ritual. This means that the time of day, place or cue automatically starts you towards grabbing your bag and heading out. If your workout times are completely random, it will be harder to benefit from the momentum of a ritual.
    10. Stress Relief – What do you do when your stressed? Chances are it isn’t running. But exercise can be a great way to relieve stress, releasing endorphin which will improve your mood. The next time you feel stressed or tired, try doing an exercise you enjoy. When stress relief is linked to exercise, it is easy to regain the habit even after a leave of absence.
    11. Measure Fitness – Weight isn’t always the best number to track. Increase in muscle can offset decreases in fat so the scale doesn’t change even if your body is. But fitness improvements are a great way to stay motivated. Recording simple numbers such as the number of push-ups, sit-ups or speed you can run can help you see that the exercise is making you stronger and faster.
    12. Habits First, Equipment Later – Fancy equipment doesn’t create a habit for exercise. Despite this, some people still believe that buying a thousand dollar machine will make up for their inactivity. It won’t. Start building the exercise habit first, only afterwards should you worry about having a personal gym.
    13. Isolate Your Weakness – If falling off the exercise wagon is a common occurrence for you, find out why. Do you not enjoy exercising? Is it a lack of time? Is it feeling self-conscious at the gym? Is it a lack of fitness know-how? As soon as you can isolate your weakness, you can make steps to improve the situation.
    14. Start Small – Trying to run fifteen miles your first workout isn’t a good way to build a habit. Work below your capacity for the first few weeks to build the habit. Otherwise you might scare yourself off after a brutal workout.
    15. Go for Yourself, Not to Impress – Going to the gym with the only goal of looking great is like starting a business with only the goal to make money. The effort can’t justify the results. But if you go to the gym to push yourself, gain energy and have a good time, then you can keep going even when results are slow.

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