April 21, 2015

April 21, 2015
How to Boost Your Credit Score

Welcome to another day in my life. Today is Tuesday and I hope you are having a beary safe and great week so far. Dab the AIDS Bear and I are busy consulting with my doctors this week.

One of the facts of life in the United States is having credit. Whether your credit is through a mortgage, credit cards, credit lines or other method; your rating depends the interest rate you will get on your credit.

So how can you raise credit score? I will blog on this issue today to hopefully help you get your credit score higher and help you in the future.

If your credit score is under 700 (the number considered prime), youíre not alone. More than 55 percent of Americans have subprime credit scores, according to the 2015 Assets & Opportunity Scorecard.

But low scores donít have to be permanent. In fact, credit scores are constantly in flux based on your ongoing financial behaviors. And by making the right moves, you can steadily turn your low credit score around.

Follow these five steps to boost your credit score.

Know Your Numbers

Many people know their credit is poor, but they donít know specifics. You need to know where youíre starting from.

Start by finding out your credit score. You can access one free credit report each year at AnnualCreditReport.com or by calling 877-322-8228. The report will include a credit score from the three major credit reporting agencies: Equifax, Experian, and TransUnion.

After you receive your credit report, review it for accuracy. If you find any errors, correct them right away. That includes anything from an incorrect address to an incorrect outstanding balance on a credit card, Gallegos says. The best, fastest, and most effective way to correct errors is to follow the directions on each agencyís website. Under terms of the Fair Credit Reporting Act, the credit bureaus must investigate any disputed items and remove them from the credit report if they cannot be verified. If you disagree with the results of a credit bureauís investigation, you can ask the bureau to include a statement of dispute in your file and your future reports.

Always Pay On Time

On-time payments of bills are the most important factor in developing good credit, so start paying every bill on time, every time. On-time payments account for 35 percent of your credit score and have been known to improve scores for some people as much as 20 points in just a couple of months.

To ensure that youíll pay your bills on time, make a note on your calendar on the date each bill is due. Even better, go the set-it-and-forget-it route: Set up automatic payments through your bank to pay off balances on or before the due date each month.

Pay Down Your Balances

If you have credit card debt, work fast and furiously to pay it down as much as you can. A credit card balance of more than 35 percent of your available credit line will hurt your credit score. If you have a credit card with a limit of $10,000, and you owe $3,500 on it, that's 35 percent utilization. Anything over 35 percent is considered high. Over 50 will have a definite negative impact on a credit score, and a maxed-out card will very negatively impact the score.

Try to pinch and scrape for several months (or as long as it takes) to get your credit card debt to below 35 percent utilization to increase your score. And if you choose to continue using a credit card, make sure you donít charge above that 35 percent threshold.

Continue Using Credit

When youíre working to reverse a poor credit score, it can be tempting to avoid charging or borrowing anything. But itís more beneficial to use credit responsibly than to stop using it altogether. Credit agencies rely on past payment history to gauge how borrowers will do in the future. If you donít borrow, they have little information to rely on.

And if much of your past (or recent) credit history is negative, you need to build positive history by continuing to use credit and paying on time. If you donít have a credit card, other types of credit, such as student loans and car loans, also help build credit. But paying all bills ó including rent, phone, Internet, and utility bills ó on time is always important.

Rethink Your Lifestyle

For some people, a poor credit score is the result of a job loss, accident, or unexpected illness. But for many, itís simply the result of spending more money than they have. If you fall into that category and want to rehab your score, youíll have to change your spending habits.

Learn to live within ó or better, beneath ó your means. This means not carrying credit card balances and charging only what you can pay in full each month.

Hopefully, these tips will help you increase your credit score. Hope you have a beary great Tuesday!

Until we meet again; here's wishing you health, hope, happiness and just enough.

big bear hug,

Daddy Dab