Did you know that nearly half of all Americans are unaware of their credit score? Are you one of them? In addition, Federal Trade Commission (FTC) finds that one in five consumers have an error on their credit reports, making it all the more important to make sure it's accurate.
When you need access to credit, having a good credit score of 600 or more can help you get the best deals. If you're struggling with a poor score, there are simple steps you can take to improve it.
1. Check your credit report
You have one credit report with every major credit bureau: Experian, Equifax and TransUnion are the most common that creditors will check with so compare the details on each one.
2. Fix errors on your report
If you come across inconsistencies and errors, it is up to you to fix them as quickly as possible. Contact the creditor and explain the issue and find out what is required. Follow up to ensure the corrections have been done.
3. Pay on time
Your payment history makes up 35% of your credit score, therefore it's the most crucial factor for improvement. Late payments on contractual obligations such as cell phone, rent or mortgage, car payments, credit cards and more will decrease your score. Set up automated payments or set up a payment schedule on your bank app to guarantee you won't miss a payment.
4. Check your credit utilization rate
Your credit utilization rate tells lenders how well you’re managing finances. Ideally, you want your utilization ratio to be less than 30% and greater than 0%. Compare your credit card balance to limits to determine utilization ratio.
5. Pay off debt
Paying off debts can massively improve your credit score. Unpaid debt is one of the biggest factors for poor credit scores. 1StopDebt specializes in helping consumers eliminate debt. We can help you find out what you can afford and negotiate repayment terms. Call today to get started!