Whether you're hoping to get pre-approved for a mortgage, or you're in the market to buy a new car, having a healthy credit score is something every woman should insist on achieving as early as possible in her career.
After all, regardless of what industry you work in or how much money you make, a good credit score is financial goal that will pay dividends over the course of your life. Even if your score is already a good one, a slight boost can still help you save a good amount of money over the long haul. So, take the credit bull by the horns. Here are six tips for improving your credit that anyone can take advantage of.
Know Your Credit
You can't improve what you don't know about, which is why the first step in improving your credit is to get familiar with the score you currently have — not just so that you have accurate information, but so you can see the history and practices that brought you to it. Request a free copy of your credit report from each of the three major credit reporting agencies. Then, look each one over carefully, being sure to note any discrepancies. Should you find any errors, be sure to file a dispute with the agency that reported the error no later 30 days from when you received the report, so a correction can be made.
Pay Down Credit Card Balances
Not all credit card companies or offers are alike. While there are some great credit card offers out there, others may count on smoke and mirrors to bilk the unsuspecting out of money. And, regardless of the type of card you use, if you carry a balance from one month to the next, you're not only paying more for purchases than you should, but you're also hurting your credit score.
Hunker down, and pay off credit card balances. If being completely credit card debt-free isn't possible in the time you need to improve your credit, work on at least getting the balances to under 10 percent of the available credit limits on each card.
Paying attention has so many benefits across the full spectrum of living it's amazing more of us don't do it more regularly. In the “improving your credit” department, this seems especially true. Keep a close eye on your bills each month, and make sure you're paying on time, every time.
Don't just assume checks are received. Make sure they clear each month. If you automate your payments online, make sure you always get a confirmation number. In every way you can, protect yourself and improve your credit score through diligent attention.
Understand the Nuisance Balance
The nuisance balance is having small balances spread across a large number of cards. Because credit and human beings have a complex relationship, a credit score doesn't just consider your debt to income ratio. When you have a lot of cards that carry balances — even if those balances are small — it looks to the credit companies like you might be someone who bites off more than she can chew. So, eliminate it. Pay off those pesky little balances, and if you must carry some debt from month to month, do it on one card that has a low interest rate.
Always Pay on Time — Always
It doesn't get any simpler than this tip: Always pay your credit card bills, your utility bills, your mortgage, your rent, your bookie, your health insurance — every single bill you have — on time, every time. It's quite possibly the most important thing you can do to improve your credit. It's also one of the simplest, assuming you're living within your means.
Live Within Your Means
Which gets us to another important point: If you aren't living within your means, improving your credit will be all but impossible. Whether you've recently had extra bills, you've changed jobs and had to take a pay cut, or you've had to take some other unforeseen hit to your monthly income, make any and all adjustments that allow you to bring in more money than you're spending. It will go a long way in reducing stress and increasing happiness, and it will provide a context for you to reach your financial goals — like improving your credit.
Don’t just stand idly by and assume your credit score is as good as it can get. Follow these six tips, and you can improve it — and save yourself money — in no time at all.