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#1 Make Your Payments on Time
When you miss making payments, this is noted and it goes against your credit rating and score. Make sure to make this an absolute priority, paying off your credit card balances each month AND all other payments.
#2 Have Reminders So You Don’t Miss Payments
Missing making any of your payments that report to any of the credit bureaus, can definitely have a negative impact on your credit score, so I suggest you have automatic reminders set to remind you ahead of time, to help prevent you from forgetting to make your payments.
#3 Keep Your Credit Utilization Ratio Low
Credit utilization ratio is the amount of credit you have available and the amount that you are actually using. It is suggested to aim to keep your credit utilization ratio down to around the 20-30% mark. So this means if you have a $10,000 credit card, that it would be beneficial to only have around $2000-$3000 on it at any time (as well as not carrying a balance from month to month, but paying it off each month).
Now I know that it can be hard to achieve this, so I suggest making more than one payment on your credit card each month, to help you keep that ratio down, ex: by making weekly or bi-weekly payments. This will help build great credit card habits and it can help improve your credit score as well. Paying off your credit card in full each month, will help your credit score as well.
Click here to download my Realistic Budget template!
#4 Know Where Your Credit Score Currently Is
Remember that this number is constantly changing. When you view your own credit rating it does not count towards your “negative” rating such as when others do it. You can use Equifax or TransUnion to get your credit rating. If you do it online and want it right away, it costs you money, but if you have it mailed to you, it doesn’t cost you anything. You can also use Borrowellto receive your credit score for free. Borrowell is the credit score monitoring program that I personally use for myself as well as my personal finance coaching clients. Do note, that your credit score is always changing, so this is just a snapshot of where it currently is. I think it important to know where it is so you know where you are starting at.
#5 Make Sure There Are No Errors On Your Credit Report
This can happen and you don’t want something that was incorrectly entered in, to be affecting your credit rating. I suggest checking this at least once a year to make sure there are no reporting errors. If there are, you can contact Equifax or Trans Union to speak to them about getting the incorrect information cleared up.
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#6 Be Conscious When Applying For Credit
Protect your credit rating by not allowing people to run credit checks on you all the time. When you are talking to people about borrowing credit, realize that it does come with consequences, so be very mindful how often you are asking for credit or a loan because this is being tracked and if you have too many in a time period, it will look negatively on your credit report. Most companies don’t tell you before they run a credit check, so make sure you are inquiring first if they are going to run your credit check and then you can tell them if you are okay with them doing that or not. Even something as simple as looking at a vehicle, they can run your credit score without you even knowing.
Click here to download my Realistic Budget template!
Frequently Asked Questions about Financial Coaching
#7 If You Have Credit With Someone Else, Have Them Work on Their Credit Scores Too
If you hold any credit cards or loans with someone else, then the strength or weakness of their credit score also affects your interest rates and credit history on those debts. So if they work on improving their credit scores as well, it can also be a benefit to you.
Click here to download my Realistic Budget template!
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