Disclaimer: The following is a sponsored post by Lexington Law. All opinions are 100% my own.
Improving your credit score can potentially save you thousands of dollars.
For example, did you know someone with a low credit score could potentially pay up to 17.5% on a car loan, as opposed to someone with a great credit score for an interest rate of 3%?
That's thousands of dollars in savings just for 1 car.
A person buying an $18,000 car will pay almost $8000 an interest if they have a low credit score, versus someone who has a high credit score only paying $1500 an interest for the car priced the exact same.
Though many people think good credit is only important for opening a new credit card, there are so many more important reasons why having a great credit score is important.
Here are a few major reasons why having a great credit score matters:
- Better interest rates on loans (potential savings of thousands)
- Higher chance of getting selected for a house or car loan
- A larger selection of credit cards with great signup bonuses
- Some employers conduct a credit check during the hiring process
1. Challenge your credit score
Lexington Law has 10+ years of experience acting as advocates for consumers who need help repairing their credit and making sure they have a fair, accurate, and substantiated credit report.
Lexington Law has challenged virtually every credit problem, which has aided in removing millions of items off credit reports.
They can even give you a free credit report summary and credit repair consultation.
Lexington Law has helped clients with over 10 million removals in just 2017 alone.
They've helped clients remove inaccurate and unverifiable items (such as late payments, charge-offs, and more) from their credit score.
Paralegals are available by phone, email, and the website to ensure you get the needed assistance you need and to answer any questions you may have regarding your credit report.
2. Stay aware of your credit limit
Do you know your credit utilization ratio?
A credit utilization ratio is the total amount of credit you've used divided by the total amount of credit you have left.
Keeping your credit utilization ratio below 30% is recommended.
Example: My credit limit is $10,000, so I would not want to spend more than $3,000 on my credit card to keep my credit utilization rate low.
3. Set up autopay
Missing a payment can be easy to do when you're responsible for several bills.
Luckily, we live in a time where everything can be on autopay, such as cable, internet, electricity, and credit card bills.
Having less late payments (or none at all) will make sure you're doing the best you can to increase your credit score.
Late payments will decrease your credit score and impact the score for years to come.
Don't make a silly mistake such as forgetting to pay a payment.
4. Pay off your credit card as soon as you use it
When you pay off your credit card as soon as you use it, this ensures that you don't forget to make any payments.
Not only that, you'll know exactly how much money you have for the month since you won't be forgetting the money on your credit card, which is an easy thing to do.
This also helps keep your credit utilization rate incredibly low, which is a good thing!
5. Get a credit card if you don't have one
If you're responsible at managing your money, then a credit card can be a great way to improve your credit score.
Like I mentioned above, every time you use your credit score, pay it off as soon as you use it. Not only does this help you with your credit score, but you'll also be rewarded with credit rewards (every credit card is different, my credit card gives me 1%-3% cash back).
However, you may be one of those people that manage their money better without a credit card.
I totally get that! My boyfriend does not use a credit card and neither does one of my friends. You do not need a credit card to get a high credit score.
6. Be aware of hard inquiries
When you apply for new credit cards at stores like Best Buy or Amazon, you take a hit during those applications.
So though you may be tempted at every single store you go to (those bonuses and discounts for opening a credit card sure are blurring!) they can add up and several points off your credit score.
Also, opening up a bunch of credit cards at stores makes it way too easy to spend a bunch of money.
Hard inquiries are different than soft inquiries. Soft inquiries are used during background checks or when a lender is trying to increase your credit line.
If autopay scares you (which is understandable!), then you could set up reminders to pay for bills instead.
You can set up text or email reminders to make sure you pay off bills on time, which is crucial to improving your credit score.
You could use a free reminders app (every iPhone is built with one) or use your phone's calendar to set up reminders.
8. Set up small goals to pay off debt
If you have credit card debt, set up small, manageable goals to pay off the debt.
It's a lot better sounding to pay off $100 per month off a credit card than looking at it as needing to pay off $10,000.
Set aside an amount you are comfortable with putting towards your credit card each month. This will reduce your credit utilization rate and help you move toward having a debt-free life.
9. Pick up a side hustle
A side hustle can help you pay off your debt even faster to help bring your credit score up.
Are you interested in different ways to make money?
10. Be patient
One of the most important tips for improving your credit score is being patient!
Building your credit score is a journey and isn't a quick process.
However, using all of these tips and tools together can greatly improve your chances of increasing your credit score as fast as possible. 🙂
Lexington Law has helped hundreds of thousands of clients remove inaccurate and unverifiable items from credit reports such as late payments, collections, charge-offs, and more.
If you need assistance with filing disputes or challenging specific items on your credit report, learn more about Lexington Law here and start getting the help you need today.
In a nutshell:
1. Repair your credit with the help of Lexington Law.
2. Stay aware of your credit limit and make sure you are in a healthy ratio. Or have no credit debt at all.
3. Set up autopay so you don't miss any payments and stay clear of late fees.
4. Any time you use a credit card, pay it off immediately.
5. Get a credit card if you feel you can use it responsibily.
6. Be aware of hard inquiries.
7. Set up reminders on your phone if you do not want to set up autopay.
8. Set up small, tangible goals to pay off debt.
9. Pick up a side hustle, such as dog walking, babysitting, or doing online work.
10. Be patient and follow through with your plan to increase your credit score.
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How are you improving your credit score?
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