You can’t post a screenshot of your credit score on Instagram and expect to get more than a few likes maybe by your parents or accountant. But, your credit score is way more than just a number. It determines nearly everything in your life from the interest rate you receive on loans, to whether you can rent that awesome new apartment or not, and sometimes even whether you get a job or not. Getting a good credit score is something that takes time and commitment, but if you follow these five easy strategies, you’ll be on your way to getting the numbers you need so you can purchase that new car, home or whatever you set your sights on.
Step 1. Check Your Credit Score and Your Activity
There are three different agencies that monitor your credit score: Equifax, Experian, and Callcredit. Before you do anything, you need to see where you stand. Nowadays, checking your score is easier than ever so you can not only see how you are doing, but also check your credit history.
Even if you have never taken out a loan, used a credit card or gotten into debt, there are plenty of things that might be affecting your rating. For example, you can check for any fraudulent activity or even simple cases of mistaken identity. On countless occasions, credit agencies have actually mixed up with different individuals and people have received low scores because their name was similar to someone with credit problems.
Step 2: Pay Your Bills On Time
This seems like simple advice, but it really does make a difference. Everything from your Internet and phone bill to your monthly electricity and utility charges is all tied together. Your credit history and your record of paying bills on time or not demonstrates to financiers that you can manage your money effectively.
Step 3: Register to Vote
This isn’t just a suggestion for you to do your civic duty, but actually an important financial move. You need to get on the electoral roll. If your name is not on the list, you’ll actually find getting credit much more difficult. Best of all, you can easily register to vote online in just a few minutes and can even vote electronically in most elections nowadays.
Step 4: Start Building Your Credit
These days, there’s no reason why you shouldn’t take advantage of credit cards that help you build your credit rating. Even those with a low score can usually get a card from their preferred bank providing they meet basic requirement. There are many no annual fee cards out there and with many great perks from cash back rewards and more.
Just don’t fall into the trap that many people do. These introductory cards typically have high-interest rates, if you pay your bills on time, you’ll have no problems, just be sure not to miss a bill or your debt will stack up.
Step 5: Avoid Risky Behavior
Credit is all about consistency and demonstrating you know how to maintain your finances well. If you start missing payments or begin charging significantly more than you usually do, it sends red flags to your creditors.
This also includes a few other things like taking cash advances or even using your credit card at businesses that may be a sign of impending financial stress like a divorce attorney or pawnshop. The goal is to always appear steady and reliable.
Getting the Credit Score You Want
Building great credit takes time, but it doesn’t have to be hard. If you keep an eye on your finances with apps like Mint which tracks your spending, pay your bills on time and use credit wisely, you’ll be on the path to the smart financial management to a solid future.