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Five Ways to Improve Your Credit

3/22/2017

 

As part of Credit Eduation Month, we are continuing our blog series on credit. We've discussed the differences between credit, a credit report, and credit score, as well as the factors that make up a credit score. This week, we have a few tips for how to improve your credit. 

  1. Establish a Credit Report – The only way to improve your credit is to have credit. Whether it be an auto loan or a mortgage, a personal loan or a credit card, having some sort of credit to report on is the first step in improving your credit.
     
  2. Make Payments and On Time! – Payment history plays a huge part in what makes a credit score. Paying on time is crucial in building your credit. Late payments stay on your credit report for seven years, so you want to ensure that your payments are being made on time. It is also good practice to make more than the minimum payments if possible.
     
  3. Get a Credit Card – Using a credit card regularly and maintaining a low balance is a great way to build your credit. By using the card regularly, and then making the payments on time, you are showing the ability to manage your credit and make payments as agreed upon. (Check out our Visa Rewards Credit Card here)
     
  4. Use Caution in Closing Accounts – You want to keep your longest standing account open as it increases your credit history. The length of your credit history plays another large factor in your credit score. The longer you have had established credit in good standing, the better.
     
  5. Time is key – Your credit will not magically improve overnight. Time and patience are key in improving your score. Open accounts in good standing will stay on your credit report indefinitely, while closed accounts in good standing will remain for 10 years. Collection accounts and chapter 13 bankruptcy will remain for seven years, while unpaid tax liens and chapter 7 bankruptcy will show up for 10 years. Credit inquiries only show up for two years. All of these factors do play a role in your credit. But by continually maintaining good credit habits, you are able to improve your credit score steadily and surely.

If you would like to discuss your credit and come up with a personalized plan to improve it, please visit your local American 1 Credit Union and ask to speak with a Member Service Specialist. 

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