Building and maintaining a good credit score is really important. So many things depend on a good score, from buying or renting houses, owning a credit card or getting a loan, mobile phone contracts, monthly car insurance and even opening a bank account. Understanding credit scores can be complicated if you are not sure what you are looking for, but it is absolutely vital that you keep an eye on it and investigate anything you're not sure about. If you are really struggling with money and your credit score, a chapter 7 bankruptcy lawyer can help you. As well as the obvious making sure you do not default on payments, there are a few things that you can do to help build and boost your credit score.
Register to vote
It is really unlikely you will ever get any credit if you are not on the electoral register. It only takes a few minutes to do online, and you can opt out of the edited electoral register which can be used for marketing purposes. Lenders use the electoral register to verify your address and identity, so it's imperative that you get yourself on it. Plus - there's no excuse for not voting then as well!
Use credit to build credit.
It sounds absolutely ridiculous, but you have to 'prove' to lenders that you are responsible enough with credit. If necessary, take out a credit card. Take out the smallest amount you need, use it wisely and repay it in full every month. This will gradually help to build your credit score. Do not apply for credit too often though, as every time you apply for credit, lenders do a search on your credit file. These searches leave a footprint, which can have a negative impact. If they see you have applied regularly for credit, it's going to flag up something isn't quite right and you'll more than likely get rejected. Think carefully before you apply and space them out as much as you possibly can.
Don't Close Old Accounts
Your credit score considers the length of your credit history and looks at when you last used a particular account. In general, the longer your credit history, the higher your score so it makes sense to keep older credit cards open and active, even if you do not use them.
Have a good mix of credit types
Lenders generally like to see that you can manage multiple loans and forms of credit at the same time. It is good to have a mix of credit cards, student loans, auto loans, mortgages etc., all running at the same time. Of course, it probably wouldn't be useful to open new ones just to bump up your score, but if you do need them, it certainly won't hurt!
All in all, if you always pay on time and handle credit responsibly, you are already on the right track to building up your score and getting your financial life on track. These tips should just make the process a little smoother and a little faster.
CANDY TAI is a wife to David and mom of 5 with a degree in Communications. She's a native Texan (Hook 'Em Horns!) who's been making her home in the Kansas City metro area for nearly 15 years. She loves being able to shuffle her kids from their various sports activities, piano lessons, and school activities. She enjoys fashion, beauty, reality TV, and moviegoing.