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Having a great credit score is the optimal way to qualify for and receive the low interest rates you want for a home or car loan. As lenders become more wary of borrowers due to the current credit crisis, it is highly important for anyone interested in obtaining a loan to have a high credit score. Presenting a high credit score will allow you a wider range of loan options, and also save hundreds or thousands, over the life of your loan.
However, if you find that your credit score isn’t as high a it should be, that doesn’t mean you are doomed to high interest rates for life. There are a few quick ways to boost your credit that will give you a higher score in as little as six months. Three easy ways to boost your credit score include:
Always Pay Your Bills on Time
Paying bills late can negatively affect your credit score. Always pay your credit card and utility bills on time. Also, pay more than the minimum – even if it’s just ten dollars more. If you find yourself unable to pay all of your bills on time, pay your loan bills first as these will have the greatest impact on your credit score.
Try to Have Few Credit Cards
Credit cards and loans are useful to improve your credit score, but opening numerous credit card accounts will not have the positive effect on your credit score that most people assume. Too many credit cards or new credit accounts may actually lower your score because the age of the account is low. To maintain the best score possible, just stick with one or two cards that you have had the longest.
Keep Balances Low
High credit card balances can greatly reduce your credit score. Maxing one out can reduce your score by 70 points. Try to keep all balances below 60 percent of your credit card’s limit. Anything over may suggest you have outstanding debt which may lower your credit score.
In addition to properly managing credit cards, you also need to remain proactive about monitoring your credit history. Most people don’t realize their credit score isn’t the best it could be until they are applying for a home or car loan. To have the best chances at maintaining a great credit score, it is always important to keep an eye on your credit history. If closed accounts, medical bills, or fraudulent charges are marring your credit score, take the time to remedy the accounts negatively affecting your score.
Samantha A. Gregory is an author, consultant, and speaker. She’s a single-mom lifestyle, money, and parenting expert featured in The Washington Post, The New York Times, Essence Magazine, HuffPost, ABC News, and Mint.com.
Samantha founded the award-winning RichSingleMomma.com™, the first online magazine featuring personal finance, parenting, and personal development content and courses for single moms.
She aims to inspire women who are ready to thrive and not just survive in their single motherhood journey. Connect with her on Instagram @richsinglemomma.
