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How to Build Your Credit Score

Your credit score is more than just a number, and it is not something to be taken lightly. It is a snapshot of your creditworthiness, and during troubling financial times, a strong credit score is essential for lenders to extend a line a credit to you.

Until recently, a score of 720 could land you the best possible terms on a loan or line of credit. Now, creditors and lenders tend to require a score of at least 740 before they will even begin to offer the most desirable interest rates. The lower your score, the higher your interest rates will be, and in some cases – depending on your score – you may not even qualify for any credit at all.

Loans and mortgages are not the only places your credit score counts. Poor credit can haunt you in other aspects of life as well. Your credit score is looked at by insurance companies as they evaluate your premiums, by landlords if you are applying for an apartment, and even employers may be leery of hiring people with troubling financial backgrounds.

Having a weak credit score does not have to mean financial doom. There are several ways to build your credit score and improve your overall financial situation.

Know the Situation

The first step toward repairing your credit is finding out what your current score actually is. Under federal law, everyone in the United States is entitled to one free copy of their credit report from all three credit reporting bureaus every year. Your report can be obtained in just a few steps from www.annualcreditreport.com. Once you have your credit report in hand, take a look at your score and thoroughly review your report for accuracy. Even the smallest error or even a typo can create a ding on your score.

Make a Plan

After reviewing your report, it’s time to sit down and evaluate just how to fix your score. Look at how and where you are using your credit, and where your largest debts are. You will want to come up with a plan on how to attack your debt and where to make larger payments so that you will start to make a dent on your debt.

Paying down your debt is, of course, the best way to build your credit score, but it is also important to remember that using credit will also help boost your score. Just bear in mind that using credit and carrying a balance are not one in the same. Creditors want to see that you not only use credit, but that you are able to pay it back regularly – and in full.

Don't Take Shortcuts

Be wary of companies that say that they can fix your credit quickly, for a fee. The only way to build a solid credit score is with time and patience. Quick fixes are impossible, and if you find someone promising you results quickly for a large fee, odds are you are being scammed.

Contact Advantage CCS

For more effective ways to improve your credit score, contact Advantage Credit Counseling Services. We offer several debt management services that can help you get you get your credit and your finances under control. Contact us for more information today.