Posted On: March 11, 2024 by Prevail Bank in: Banking
How can I improve my credit score?
Your credit score is important because it reveals how dependable or risky you are as a borrower based on your history. The table below was borrowed from the Bajaj Finserv website. It summarizes what a credit score range signifies and the probability of a loan approval. In this blog we will provide you with 4 ways to improve your credit score.
Is your credit score affecting your life in a negative manner? Improve it. Here are some helpful tips on how to increase your credit score and get your life back on track financially.
- Avoid past due payments.
- Don't max out your credit card.
- Monitor your credit score.
- Keep credit accounts open.
Avoid Past Due Payments
Payment history is the main factor when determining your credit score and making a payment on time, every time is very important. Signing up for automatic bill pay through your financial institution’s online banking platform is an easy way to avoid missing a payment and late fees. If you are unsure as to how to make this happen, a representative from your financial institution would be happy to assist you.
Prevail Bank’s digital banking technology allows customers 24/7 access to their accounts and the ability to: · transfer money between their accounts · pay their bills online · establish automatic bill payments · and view your bill payment history electronically through an eStatement option. If you’re interested in moving your accounts to Prevail Bank, ClickSWITCH is a fast, secure, and free way to make it happen.
Best practice is to pay off your credit card balance, in full, by the due date each month, so you don’t incur any interest expense.
Don’t Max Out Your Card
Credit utilization (the amount you do borrow compared to what you can borrow) is an important factor in your credit score. Meaning, you may be approved to charge a large amount of money on your credit card, but ironically, for a better credit score they want you to utilize 30% or less of the amount you were approved for. That’s less than half! So, if you find yourself maxing-out your credit card limit, you’re hurting your credit score. Spending more than your credit limit will certainly hurt your credit history too. So, you want to find ways to reduce your spending and ask your credit card company for an increased limit. But for goodness sakes, don’t spend more when the limit is raised!
Monitor Your Credit Score
Annualcreditreport.com is the authorized Federal site for your free credit report. One credit report is allowed every 12 months from Equifax, Experian, and TransUnion. Take advantage of these reports to monitor identity fraud and review your information. If you notice a discrepancy, report it immediately.
Prevail Bank offers its customers a free monitoring service called Credit Sense. Credit Sense, in addition to monitoring credit scores, also offers tips for improving your credit score (beyond what is listed here), any calculated savings if you were to consolidate your debt or refinance, an analysis of your spending habits/budget, helpful suggestions to improve your financial health, and more.
For a small monthly fee, peace of mind, protection, and identity restoration services are available through ID TheftSmart.
Keep Credit Accounts Open
Longevity shows lenders you are able to manage credit responsibly. Meaning, the longer you have an approved credit card in your possession, the better. Equifax recommends having two to three credit card accounts at a time. If you have more than that, it may be hard to keep track of monthly payments. As shared in Point 1, you don’t want to miss a payment because they can result in fees and lowered credit scores.
Another worthy note, if your card has a $0 balance, that’s okay! Keeping accounts with a $0 balance helps with your credit utilization ratio. (See point #2 above.)
Having trouble acquiring a credit card so you can build credit? Prevail Bank provides access to two consumer credit card offerings that are acknowledged to be great for someone starting a credit history or for someone who has been turned down for a credit card: Visa® Max Cash Secured Card and Visa® Secured Card. Check them out. [The creditor and issuer of these cards is Elan Financial Services, pursuant to a license from Visa U.S.A. Inc.]
The word ‘Secured’ in the card titles refers to a savings account that you’ll ultimately be asked to establish. The amount of money you put in this special savings account becomes your credit limit. The funds in this account are NOT used to pay any credit card obligations, except when the credit card account is closed. They essentially act as a security blanket for VISA®; you are literally building credit like everyone else!
The above is an abbreviated list of how you can improve your credit score. But please don’t think because this list is short, it isn’t important. Your credit score is important - unless of course you enjoy being turned down by potential landlords and lenders, or paying thousands of dollars more in interest when you borrow funds to purchase a car, recreational vehicle, or home.
