Steps to Improve Your Credit Score
Steps to improve your credit score
One of the most important keys to financial success is maintaining a good credit score. And among the important factors for raising a credit score is paying off any outstanding debt. However, achieving that is often easier said than done. Given the budget constraints many people face, it can be difficult to pay off every penny of a credit card bill or mortgage loan every month.
There are multiple strategies to take that can help reduce debt while boosting a credit score. Look over the following suggestions to see what plan may work best for you.
Stop borrowing money
No matter what kind of debt you may have - from student loans to car payments one of the biggest mistakes you can make is taking out more loans to pay it back. While you may think you are helping your credit score by wiping away the large amount owed, in fact you're just creating more problems to deal with down the road. As Forbes contributor Nick Clements explained, borrowing money or taking out additional credit cards to build a credit score doesn't end up working. Pay back the full amount of the debt you owe as quickly as you can, and you'll slowly see your credit score start to rise. Taking out larger loans or an extra card just ends up elongating the process, but doesn't provide much help.
Create payment reminders
The best way to boost a credit score is to pay the full amount on all your credit card bills every month. That makes avoiding late fees vital, since they just add to the amount you will owe.
MyFico suggested setting up an automatic payment system with your bank or credit card company, or creating monthly reminders for yourself. This way, there isn't a chance you forget to pay back your debt.
Many banks and companies offer email or text message services that can help remind you of when payments are due. Or if you want to take action on your own, set up a calendar update on your smartphone that notifies you every month of when it is time to pay off credit card debt. Given how important raising your credit score is, you cannot afford to forget about when payments are owed.
For more information on how to raise your credit score, talk with the financial professionals at Vectra Bank.