■ Richard Perry / The Hemet Car Guy
Greetings from The Hemet Car Guy!
Many people have credit challenges and everyone’s credit score can vary at any given time. For example, your credit score can depend on your current balances at the time your credit is run. My wife and I make every effort to pay off a charge on our card in full when the statement comes in. If we want to refinance our house or need a loan for ourselves or our business, the interest rate will be determined based on our credit rating. This is why we are protective of our credit rating.
Some people I know hire a credit repair company to work on their credit because they find it difficult. But in reality, it really doesn’t have to be. In fact, by knowing a few simple tips, you can improve your score and increase your chances of getting approved for loans at much lower interest rates. This will also improve your overall financial situation. Having a high credit score can go a long way in making many aspects of your life much easier.
Here is how to increase a poor or average credit score in a short amount of time:
Fix Credit Report Error: Did you know the Federal Trade Commission estimates that roughly five percent of all consumers have some type of error on their credit report? Many of these errors have negative impacts on credit scores and results in higher interest rates for consumers. However, by keeping tabs on your credit report, you can better identify when errors occur. Everyone has access to a free credit report every year from three of the country’s largest credit bureaus such as Experian, Equifax, and TransUnion. When you have your credit report in hand, look it over for any potential mistakes such as late payments that were actually paid on time or negative information that should no longer be listed on the report. If you find errors, don’t be afraid to dispute them. Who knows, maybe you’ll get them removed. If you do, your credit score will thank you.
Be Mindful of Your Credit Utilization: Credit utilization refers to the amount of credit limit you use on any given credit card. Many consumers aren’t fully aware that having high credit utilization can drastically impact your credit score, and not in a good way. Because of this, many financial professionals advise consumers to try and keep their credit utilization at 30 percent or less of their credit limits. To help manage the credit utilization, you can:
• Make a series of small payments throughout the month on your credit cards to keep the balances low.
• Request credit limit increases. If you do this, make sure to ask your credit card company to do so without making a hard credit inquiry because that can cause your score to temporarily decrease.
• Pay down balances on your cards that have the highest utilization before paying down others.
• Consider consolidating your debt to either eliminate or reduce your card balances. This will effectively lower your utilization.
Get on Top of Past-Due Payments: You can try the above-mentioned tips, but if you’re not making timely payments, you probably won’t see much of an improvement in your credit score. Like it or not, payment history matters and is the biggest influence on your credit score. With all this said, if you’re behind on payments, now is the time to bring your accounts up to date.
Hope this helps. If you want to know more don’t hesitate to stop by and mention the Valley Chronicle.