Having a good credit score is essential throughout many aspects of life. While ignoring financial problems might seem like the best way to handle stress at the moment, failing to pay your bills on time can have significant consequences in the long run.
Bad credit causes financial harm, increased insurance and credit rates, and even the inability to get a car or house. The good news is that you can work to improve your credit over time. However, you need to avoid future financial problems if you want to get ahead of your poor credit. In this article, we’ll go over some steps you can take to improve your credit score on your own before consulting a professional.
5 Steps to Improve Your Credit Score
Here are some steps you can take on your own to improve your credit score:
1. Work on Your Credit History
One of the most vital components of your credit score comes from your credit history. Your credit history is based on the information that your creditors share with credit bureaus. This includes late payments, balances, debt to income ratio, terms of financing, and how long you’ve had an account.
2. Secure Credit Cards
Whether you are just getting started with building new credit or you need to repair poor credit from the past, securing a credit card is a significant step to improve the health of your credit score. Once you get a credit card, keep your balance low. Be sure to pay at least the minimum amount due on or before your due date. If you don’t qualify for a credit card, consider taking out a secure card. While this requires you to put in a deposit that the credit card company will hold, these cards are a great way to prove that you’ve gotten better at handling your debts.
3. Get a Co-Signer
If you need to get a loan with poor credit or no credit history, consider finding a co-signer. This can help you improve your credit significantly. Keep in mind that your co-signer is responsible for any payments you miss. So, make sure you pay your balance on time.
4. Pay Your Bills on Time
Paying your bills on time is one of the most important ways to improve your credit. Pay your bills before they are due and keep any debts, credit lines, or loans in good standing. Late payments are recorded on your credit report and stay there for a long time. They can negatively impact your credit score, so be sure to pay your bills on time.
5. Credit Utilization
Another thing to keep an eye on is your credit utilization. If your account balance is more than 30% of your available credit, it can negatively impact your credit score. To improve your credit score, keep your account balances less than 30% of your available credit. If possible, pay off your credit cards each month to further improve your credit score.
Contact All American Financial Services for Your Refinancing Needs
Improving your credit score is a vital step in refinancing your mortgage. If you need additional advice on improving your credit, All American Financial Services is here to help. Contact us today for all your Lancaster refinancing needs.