Healthy Credit Score

A great credit report is essential to getting the most out of life. Credit scores range from 300-850. The higher your score is, the more likely you are to get a loan. The lower your score is, the less likely you are to get a loan. If you have a low credit score and you do manage to get approved for credit then your interest rate will be much higher than someone who had a good credit score and borrowed money. Therefore, having a high credit score can save many thousands of dollars over the life of your mortgage, auto loan, or credit card. While is does take 7 years to remove most derogatory items from your credit report. These are some steps you can take right now to improve your credit.

1. Pay all your bills on time, every time. Not just your credit cards & loans. While certain bills are not reported to the credit bureaus when your payment is made on time, they could potentially end up on your report if you fall behind. Your payment history is very important & accounts for 35% of your total score.

2. Check your credit report at least once per year, if not more frequently to avoid identity theft and mistakes which are especially common today you should certainly keep a close eye on all three bureaus reports.

3. At no time should you charge more than 30% of your available balance on any of your credit cards. If you are carrying a high balance then make paying them down a priority.

4. Keep your accounts open as long as possible. 15% of your credit score is length of time on file. Even though your no longer making purchases with a particular card. The best approach is to keep those accounts open and use them every few months making small purchases, then paying them off.

5. Don't open a lot of accounts at once. Each time you apply for a credit card your credit is checked by the issuer. These hard inquires could affect your score and potentially cause lender to consider you a bigger credit risk.

6. Transfer your balance if you're carrying a high balance on your credit cards you can transfer your balance to a new balance transfer card, preferably one that offers 0% intro APR for up to 18 months. This will increase your limit & give you time to pay the balance down without being charged any extra interest.