Currently, we are working kind of hard on increasing our credit score. We’re not doing anything crazy, but we want our credit score to be as high as it can be for when we apply for our next mortgage.
Our credit score lowered a little bit when we started using credit cards for their rewards, so our credit score isn’t where we currently want it to be when we do start looking for homes.
Below are three ways to increase your credit score. Even if you are not looking to buy a home, your credit score can affect whether or not you get a job, your car insurance rate, your home insurance rate, a car loan, and so on. It won’t hurt you to keep your credit score up, so why not?
That being said, there are personal loans from Aspire Money that are meant for people with bad credit. So not all hope is lost.
1. Check your credit report.
If you’ve never checked your credit report or if it’s been a long time, you need to order a copy of it. You should regularly check your credit report. You never know if there may be an error, and errors can affect your credit score.
2. Pay your credit card in full.
Even though I have multiple credit cards and I charge nearly all of my expenses onto my credit card, I always pay it in full each and every month. I have never paid a late fee or any interest charges.
If you pay your credit card balance in full each month, you will help increase your credit score, and you will avoid any extra fees or charges (except for annual credit card fees if your credit card issuer charges those).
I think a common misconception that many people get wrong is that they only have to pay the minimum payment each month in order to avoid interest expense. That is completely wrong! Unless your loan is at 0%, you will be charged interest if you don’t pay your bill in full each month.
3. Watch your utilization rate.
Your utilization rate should always be less than 30% of your available credit. So, if you have a credit card limit of $1,000, you should never spend more than $300 on your credit card.
Do you know what your credit score is? Are you trying to improve your credit score? Why or why not?
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