Improving Your Score

While you may or may not be interested in refinancing or even entering home ownership, tips to improve one’s credit score are helpful across the board. An improved credit score does offer more leverage in any type of lending and is important for other aspects of living such as insurance, renting and even finding a job. But do not despair if your credit is low, there are ways to repair your credit and improve your score. Here are three very important ones…

• Check Your Credit Report Annually. Your credit report contains the data used to calculate your score and it may contain errors. In particular, check to make sure that there are no late payments incorrectly listed for any of your accounts and that the amounts owed for each of your open accounts is correct. If there are errors, you can dispute them with the credit bureau.
• Set up Payment Reminders. Making your credit payments on time is one of the biggest contributing factors to your credit score. If you don’t use an automated payment method, many banks offer payment reminders through their online banking portals that can send you an email or text message reminding you when a payment is due.
• Reduce the Amount of Debt You Owe. This is easier said than done, but reducing the amount that you owe is going to be a far more satisfying achievement than improving your credit score. The first thing you need to do is stop using your credit cards. You’ll never qualify for a home loan if you can’t manage short term credit cards.

Sources: Fair Isaac & Freddie Mac