About This Lesson
When a person is looking to build a good credit score and history there are some things that they should do. Good credit is needed to get loans for items such as cars, homes, and some employment terms may be based on credit decisions. There are some things that a person can do to get good credit.
Pay Bills on Time
This is one of the most important things to do to get good credit. A person has to pay their bills on time. They should set up reminders to tell them when a payment is done. Missed payments can have a negative impact on credit score. If a person knows they are going to be late but usually pay on time they should contact the creditor. There may be solutions or one-time forgiveness for late payment.
Keep Low Limits
The closer a person gets to maxing out their credit cards the lower their credit score will be. this makes it look like a person went on a spending spree and may have trouble paying back the money plus interest. A person should not use more than 30 percent of their total credit limit in order to keep a good credit score. A person should also try to pay off their balance each month or pay more than the minimum payment.
Limit Credit Cards
While it is okay to have credit cards a person should watch how many cards they do have. If a person has applied for several credit cards in a short period of time this can have a negative impact on their score. Lenders will wonder why a person is applying for all of these cards and this can hurt the score.
Fix Mistakes
Life event happens and a person may find themselves behind on their bills. They may miss payments. If there happens not all hope is lost. A person should contact a credit repair service. There are tools out there that can help as well. Be sure to do some research into what can help. Sky blue credit repair reviews is a perfect example of a place that can help you when researching where to start and what to use.
Check Credit Report
Credit reports often contain errors. A person needs to check their credit report often to make sure everything is accurate. There are services that will allow a person to get their credit report free once a year. If a person finds an error on their credit report they should dispute it right away. They should contact the credit agency as well as the company that they are disputing. Once the error is fixed a person will notice that their credit score improves. This will also help a person keep an eye on their credit to look for signs of identity theft. If a person notices a problem they will be able to report it right away and stop any possible issues before they become worse.
Refinance High-Interest Cards
A person should refinance their credit cards to cards that have a lower interest rate. A person can also take out a personal loan with a lower interest rate. This will help them reduce the amount of money that they owe and will help them pay off their credit in a shorter period of time. This will also decrease the debt to income ratio which will also allow a person to have their credit improve. This will also help reduce the money spent on interest.
These are something that a person can do to get good credit. Credit is needed for many things in life so it is important to make sure the credit score is high.
In the end be sure you know what you're getting and that you can stay on top loans and cards. Having a good credit report is a process and won’t happen overnight. Be sure to set reminders, fix your mistakes, keep an eye on your report and pay bills on time.
