Having good credit makes life so much easier is so many ways. However, unless you already have one, you might be asking yourself just how exactly you get a good credit score in the first place – or at the very least turn your credit around once it’s taken a turn for the worst?
What Is A Good Credit Score?
Before you can aspire to reach a higher credit score though, it’s worth taking the time to find out what a good credit score even looks like if you don’t already know. For instance, many people don’t even realize that the standard credit scale runs from 300 to 850, and does not, in fact, begin at zero. So what does a good credit score look like then? Well, typically, any credit score below 580 is considered “very poor,” with scores ranging between 580-669 being considered “fair.” A “good” score is any that falls between 670 and 739, and a “very good” score is any score between 740 and 799. Only 21% of Americans have “exceptional” scores, however, which represent any figures over 800. So, how do you get your numbers up?
Pay Everything On Time, Always
Your payment history can greatly impact your credit score, which means the more late payments you make the more obvious it becomes on your score. Late/missed payments can even stay on your report for up to seven years! So please, always pay everything you owe on time and in full as often as you can.
Improve Your Credit Utilization Ratio
Your credit utilization is basically just how much of your credit you use. Ideally, your figures should not exceed 30% of your total collective limit. If it does, this is will throw your credit out of whack. If you’re struggling, however, you can always pay more off monthly than your minimum owed amount, leave cards open even after you’ve paid them off, increase your limit, or refinance for lower interest rates.
Keep An Eye On Your Credit
Identity theft, mistakes with your personal information, or other reporting errors can make a big dent in your credit score if you aren’t careful, so you need to make sure you’re keeping an eye on your credit score at least regularly so you can dispute any changes or mistakes as they appear.
Think Before You Change Anything
Whether you’re closing an account, or thinking about taking on a new debt, think hard about your credit score and how these new changes will impact it over time. Closing down paid off accounts may throw off your credit utilization, and if you apply for too many new offers at once, the “hard inquiries” will likely raise a few red flags. Overall, just take the appropriate amount of time to consider your options before making any hasty decisions.
Mix Things Up
Finally, if you want to make sure you maintain the healthiest possible credit, you’ll want to keep your debts as diverse as possible. You don’t want all your debt to be credit card debt. You want to mix things up with a mortgage, an auto loan, and other types of debt.
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