Did you know that the average credit score in the United States is 688?
Your credit score is one of the most important things that you can have as an adult. The better your credit score is, the more likely you are to get approved for a mortgage, a personal loan, a better rate on your car insurance, and much more. However, learning how to build your credit score can be tricky, especially if you don’t have any prior knowledge of how to build your credit score.
That’s why today, we’ve created this quick guide to help you get a better understanding of how to build your credit score. Keep reading to learn more!
If you already have a credit score, it means that you already have some credit account opened up in your name. Trying to increase your score or build up your score will take careful planning and execution in your finances.
One way that you can build your credit score is by making frequent payments. If you were able to make small payments throughout the month, it’ll help you to keep your credit balance on the lower end of the spectrum. Lowering your credit balance will decrease your credit utilization, one of the most important factors for your credit score.
By keeping your credit utilization limit low, you will quickly see a change in your credit score.
Don’t Miss Payments
While you should be making small payments on your minimum credit payments during the month, you should never miss a payment. The payment history on your credit account is the most influential factor of your credit score.
If you even miss one single payment on your credit score, it can impact your credit report negatively for up to seven years. Every time you miss a payment on your credit score, it will mark your credit account as delinquent.
Monitor Your Credit History
When you’re trying to build your credit up, make sure that you take a look at your credit history. There may be a mistake on your credit history that’s causing your score to below. Requesting a free report from one of the major credit bureaus will help you better understand if there are any mistakes in your credit history.
One mistake that you could look for, for example, is a missed payment that you paid on time. Disputing these errors on your credit report will have them removed if these remarks on your credit report are found to be inaccurate.
Understanding How to Build Your Credit Score
Learning how to build your credit score is a great step to take to make your financial future more secure. Your credit score is a largely influential factor in many of the financial milestones you may have in your life. Prioritizing taking care of your credit score will help to ensure your success in meeting these goals.
Are you interested in learning more about how to build your credit score? Check out this infographic to get a better understanding today!
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