If you find yourself worrying about your credit score, you aren’t alone. Most of us care about improving our credit scores, not only because boosting your credit score feels like a personal win, but also because it helps you get better interest rates on new credit and saves you money over time. It’s great news, then, that credit scores are on the rise nationally, with the average FICO^® Score hitting 711 in October 2020, according to Experian. If you’re looking to improve your credit score, start by developing these good credit habits that will have a long-term positive effect on your finances. Your credit score will thank you.

Pay bills on time.

Keeping a consistent payment history is the most important factor in your credit score, and missing payments can ding your score quickly. We recognize that this can be easier said than done if you’re experiencing financial difficulty, but there are ways to make debt easier to manage. Here are a few tips to help you maintain a good payment history:

Request new due dates. Are specific due dates difficult to meet based on where they fall in the month? Find out if your creditor will change your due date to a time in the month that better aligns with your schedule.

Consolidate balances. If you’re struggling with multiple credit cards, each requiring their own minimum payment, consider consolidating balances into one monthly payment, especially if you can get a lower interest rate. This will make payments more manageable and help reduce compounding interest overall. Read more about consolidating debt with Grow.

Automate payments. Whenever you can, try using automatic payment options to avoid missing payment deadlines. Do you bank with us? Automate payments easily using Bill Pay in online banking.

Contact creditors to ask for assistance. When in doubt, try getting in touch with your creditors before missing a payment. Sometimes they may be able to work with you to restructure your payments, rearrange the due date, offer a grace period or provide other options. You’ll never know until you ask, so it can be a big benefit to discuss your situation with your creditors.

Review your credit reports often.

Monitoring your credit will arm you with information and help you catch fraud or errors quickly. The official way to obtain your free reports? Visit AnnualCreditReport.com. You’re legally entitled to a free credit report every year from each of the major three credit bureaus, so take advantage. Plus, to help people monitor their finances during the pandemic, everyone is eligible for free weekly credit reports from Equifax, Experian and TransUnion, until April 20, 2021. If you notice any errors, dispute the errors directly with the credit bureaus.

Keep credit utilization under control.

Credit utilization is a fancy term for everything you owe (student debt, auto loans, credit cards and other debt) compared to your total available credit. Experts recommend keeping your credit utilization ratio below 30 percent, which helps boost your credit score. If you’ve got your credit cards maxed out, that hurts your credit score because it signals to lenders that you may be in over your head.

Be patient and consistent.

Focusing on improving your credit score can feel tedious. Even though your score won’t improve overnight, it will improve over time with steady effort. Making payments on time for even six months can notch your score up a bit. Plus, past mistakes, like late payments, do eventually fade away. Most negative marks fall off within five to seven years. In the meantime, do your best to live within your means, create a budget that’ll help you navigate debt and be diligent. Visit Credit Education to learn more.

 

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