Your credit history has massive impact on your personal finances, as well as your entire life. Individuals with poor credit, or no established credit at all, face many challenges when it pertains to milestones in life like purchasing a new vehicle or your first home. Once you have established credit, it may be difficult to manage. It is important to remember, credit options may not make you dish out money immediately, but they do need to be paid back; this is where the difficulty may come in. Nevertheless, credit can always be built back up.
Here are 4 tips for building your credit.
Make Sure Your Credit Reports are Accurate
With the evolution of the internet, there are many ways for someone to look up their credit reports; some resources will provide one score, while others will go more in depth with a full credit report. There are three major credit bureaus that your credit report and score is based off of, Experian, Equifax, and TransUnion. It is important to make sure that when you are accessing these scores, they are accurate. If you see something on your report that isn’t supposed to be there, or it is not accurate and negatively affecting your score, you can attempt to dispute it.
Confirm Areas That Need to be Improved
Once you analyze your reports from all three major credit bureaus, confirm what areas need to be improved. Whether it is a credit card with a long term balance, or a loan that you’ve missed payments on. Make note of those areas, and tackle them strategically over a period of time. It is always important to remember that the improvement of credit can happen, but does often take some time and patience.
Make Any Late Payments
If you notice late payments on your credit report, immediately take steps to bring them up-to-date. Late payments can affect your interest rates, and build up penalty late fees that will push back any payment progress that you’ve been making. Always keep in mind, if you can pay off an entire credit card balance, it is better to do so as soon as you can.
Make Payments In Full & On Time
In future credit purchases and transactions, make sure to make your payments on time, and if you are able, in full. If you are unable to pay a transaction off in full, put the maximum amount you can afford toward your monthly payment; the quicker the balance comes down, the better. To help make your payments on time, considering setting up auto-pay. Auto-pay is a great tool to ensure you don’t accumulate late fees due to a missing payment.