Looking up your credit score can be quite a scary thing. But don’t put it off any longer. Checking your score regularly and knowing where you stand amongst creditors can put your mind at ease. With your credit score at the tip of your fingertips through online websites it’s not such a daunting task anymore. Plus these site spell it out for you in terms you can understand. No more hesitating, manage your credit score with a few simple steps that can begin to set you on the path to that 800+ credit rating we all covet.
To begin, don’t make checking your credit reports a yearly thing. Instead check your reports from the three agencies, Experian, Transunion, and Equifax three times a year, about every four months. This will allow you to monitor identity theft that can destroy your credit if left unnoticed, and save you the headache of trying to correct all the incorrect information being reported. Sites such as Creditkarma.com, freecreditreport.com, and annualcreditreport.com all offer this service for free. With that price tag why not check your reports to put you ahead of the game.
Then once a year check you credit score from each of the reporting agencies to know where you stand amongst others. MyFICO.com provides this service where you can obtain all three scores or just one. Typically one is offered for free while obtaining the other two can cost you. To minimize costs, depending on if you are looking into buying a home, opening more credit via credit cards or loans, find out which score or scores the lender looks at. Not all lenders will look at all three or just one, and not all three will be equal. So it benefits you to know beforehand when opening a new line of credit.
If you have too many credit cards and don’t want the temptation to use them put them away in a lockbox or file cabinet rather than closing the accounts. More open available credit, and longer standing credit lines will give you a big boost in what your score is. A young credit history is not necessarily bad but it looks riskier to lenders which may make them lean to decline your approval as well.
On accounts that you do have open, pay them on time. Set up automatic payments to avoid mistakenly forgetting to pay. Not only will you be charged a late fee and be penalized with a possible APR increase, you will also damage your score with a negative remark, thus lowering your credit standing. Another useful tip on open accounts is to keep balances at or just below the 50 percent mark. If they are high you can remedy this by spreading out the balances onto other cards or asking lenders to increase your limit. High balances or maxed out credit cards will lower your score.
Lastly, a helpful way to manage your credit rating is to keep inquiries to a minimum. When creditors see more than 5 hard inquires, this is when your credit is ran and processed, unlike soft inquires where minimal details are pulled, your credit ratings will drop. This shows lenders that you seek too much credit and you become a risk.
Knowing your score earlier rather than later down the road when you are finally looking into buying anew home will save you stress and bigger problems. If there are issues you need to take care of, knowing earlier will allow you time to improve your score. Creditors do not report your standing continuously but rather in longer stretches of time. So if you pay off a large balance on a credit card, your score won’t increase within that day or even week. It can take up to a month to take effect on your report. Simply keep these recommendations in mind and manage your report regularly and you will reap the rewards.