Maintaining or Beating an Average Credit Score – Use The Odds
690 is about the average credit score for Americans. If you are considering a purchase that will require you to take out a loan then you might want to know what your current credit score is. How you rank in terms of credit can make a huge difference as to whether you will be approved for a loan and how much interest you will be charged. Most people think that if you have debt then that is bad for your credit rating but that isn’t actually true, in fact it isn’t the debt itself that is bad, it is the way in which you manage that debt that will result in either a good or a bad credit score.
You may be fine and sitting with an above average credit score, but if you are average or even below average with your credit score then you might want to consider making some changes to try and improve that score. There are also a number of things that you should completely avoid if possible to increase your credit score.
The first thing that you should do to raise your credit score is to make sure that you always pay your bills on time. If you have trouble finding the money to pay all your bills on time, then the first priority should be your mortgage. A missed mortgage payment can really damage your credit score much more than a missed or late bill payment or credit card payment.
Next you want to change how you manage your credit cards. If your credit cards are all maxed out then this will bring down your credit score. If you have credit cards that are not used then this will raise your credit score. So one way to increase your score is to open a new credit card account and don’t use it, let it sit without being used, raising your unused credit amount and also your credit score. Don’t go crazy opening multiple credit card accounts at once, only open one every six months or so, but only ever open them if you can trust yourself to not use them. If you think you will use them and max them out then don’t open any new accounts.
One factor that can have a positive effect on your credit score is your ability to manage multiple types of credit. If you have a mortgage, a car loan, store credit and credit cards and you manage them well and always pay the minimum payments on time then this will look really favourable toward a higher credit score.
Your credit score will increase the longer you can manage your credit well. Although you can’t change the past, you can start fresh now and begin paying your bills on time, balancing a number of different credit accounts and open up new credit card accounts (but don’t use them) and the longer this continues the better your credit score will be.
Let’s just recap everything we’ve mentioned in this article. To maintain a good credit score you need to always pay your mortgage payment on time. It is preferable to also pay all other bills on time, if you can’t pay them on time then call the company to arrange an extension or payment plan.
Have some credit card accounts that are not being used to increase your unused credit amount and also increase your credit score.
Have multiple types of credit, including mortgage, car loan and credit cards, to show that you can responsibly manage multiple credit types. This will be favourable and will increase your credit score.
If you have an average credit score then you shouldn’t have any trouble being approved for a loan, however you will increase your changes and decrease the interest rate you are charged if you have a higher credit score. The interest rate charged will vary quite considerably between a person with a high credit rating and a person with a lower credit rating so it really is worth working toward a higher score.
