When it comes to credit scores, a bigger number is always better. Regardless if you’re looking to improve a poor credit score, or just want to keep your existing number moving up the ranks, E&Y Tax Preparation Services has a few tips to consider when trying to improve your numbers.
The Importance Of Your Credit Score
Credit scores hold a lot of financial importance in your personal life, and are mostly used when lenders are looking to give you money and want to understand your financial trends and behaviors. Your credit score gives these financial lenders a good idea if you will be a good customer or not. The lowest your score can be is 300, while the highest your score can be is 850.
When you have a low credit score, these financial lenders anticipate you will not have the means of paying them back, or paying back on time. Your credit score determines your ‘investment value’ to other companies . This is why a higher credit score reflects well on your personal finances, and can lead to lower interest rates, higher limits for borrowed money, and eventually save you bundles down the line.
How Can You Improve Your Credit Score?
- It will take time – You will need to develop some patience when trying to improve your credit score, as this process takes time. When you’re looking to truly improve your credit score, you are also telling lenders and your financial habits that you’re willing to make big changes in your habits. The longer you keep up these better financial habits, the more your credit score will improve.
- Clean up a credit report – You are allowed to obtain a free credit report once a year, and we highly advise doing so. This allows you to go through your credit report and clean up any issues that may have risen, or don’t look correct. When all of the details on your credit report are correct, you can get a better handle on your credit score.
- Pay bills on time – The best way to start raising your credit score is to make sure you’re paying all of your bills on time. When you have debts that need to be paid off, and you pay them appropriately, your credit score will start to soar. Additionally, try not to rack up too many charges on credit cards, as it can negatively impact your score. A good rule of thumb is to keep your spending on credit cards around 40% of the limit.
- Keep your credit cards to a minimum – We’re sure you get all kinds of credit cards in the mail, maybe even on a daily basis. This doesn’t mean you should open up a too many lines of credit, just because it is offered to you. When you have too many lines of credit open, and not enough activity, you can also negatively impact your score.
Stay focused on being fiscally and financially sound, and your credit score is bound to improve! Need more advice on how to improve your credit score. Call E&Y Tax Preparation Services today to set up a meeting with a financial expert! (248) 362-1313