5 On Your side shares ways to improve your credit score
Posted September 27, 2021 10:23 p.m. EDT
Updated September 27, 2021 11:11 p.m. EDT
From buying a car to buying a home, to whether you get that job, your credit score plays a critical role. It pays to have a good one.
“A bad credit history can also make it difficult to rent an apartment, go to college or even get a job,” said Lisa Gill, with Consumer Reports.
A low score means you’re more of a risk for lenders, and you’ll pay more interest on loans.
If you’re looking to improve or even establish your score, an important first step is to open a bank account.
If your finances are stable, Consumer Reports says take out several small loans and make on-time, monthly payments. Over time, that should improve your score.
Consumer Reports also recommends applying for a secured card card -- which is backed with cash. You can also ask a family member, who has good credit, to add you to their credit card.
Just know, if you miss or are late with a payment, it can ding both your scores.
If you have any debt in collection, pay it off as soon as possible, then pay your bills on time.
“Once you pay off any debt in collections, many credit-scoring systems won’t heavily weigh them when your score is calculated,” said Gill.
It’s also important to check your credit report carefully. You can get a free credit report here. Dispute any errors you might find by sending a certified letter, with evidence, to the big three credit bureaus. They have about 30 days to respond.
Consumer Reports adds to be wary of any quick fix credit services that offer help for a fee. You don’t have to pay to fix your credit.
It just takes a solid financial plan and time.