Improve Your Credit Score with These Simple Tips

In today’s economy, a credit score defines your purchasing power. Credits score dictate everything about your money from credit cards to mortgage approvals. And if your credit score is on the low end, you may have difficulty getting approval for things you really need like loans. You may have not realized it before, but maintaining a good credit score is essential, particularly if you want to make significantly big purchases like a car or a house. But what if you have a bad credit score due to financial mistakes like impulse purchases in the past?

Fortunately, in Ogden, bad credit home loan agencies can provide you with a home loan in a pinch. But the best way to improve your credit score is to decrease debt. And while easier said than done, it’s not impossible. Many people who were drowning in their debts have been able to clear their dues and bounce back, stonger than before.

With that said, here are some ways you can improve your credit score in less than a month:

FICO Fix-Its

According to the Fair Isaacs Corporation (FICO), 30% of your credit score consists of how much you owe. This means that paying what you owe lenders leads to lower credit scores in a huge way. But more than just being able to pay off debt, there are other factors at work like credit utilization.

What exactly is credit utilization, though? Credit utilization is a ratio that consists of how much you owe versus how much credit you have. If, for example, you have a credit limit of $10,000 and owe $5,000, your credit utilization is 50%.

According to experts, the ideal credit utilization number is 30%. Or simply put: a $3,000 debt on a $10,000 credit limit.

Credit Risk Check

Businessman calculatingThe best way to avoid having a high credit score is to always know what your credit score actually is. There are plenty of resources online but the three most trusted credit reporting agencies—TransUnion, Equifax, and Experian—allow you to check your credit for free at least once a year. Be sure to stay updated on your current credit score.

These companies will provide you with a free credit report but the credit score comes at an extra cost. However, if you do decide to purchase the cost, you may also get a list of credit risks as an added bonus. It’s good value for your money, so you may want to keep that in mind.

Vigilance is the best way to improve your credit score. It’s so easy to charge everything on your credit card and think of the consequences later. That leads you right down the path of financial slavery in the long term. But if you maintain awareness and handle your money diligently, you could be on your way to a higher credit score sooner than you think. Remember, spend your resources responsibly. Think twice before every big purchses before swiping your credit card. Don’t wait till you get a bad credit score to change and improve your habits.