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Simple Ways to Protect – and Boost – Your Credit Score

Simple Ways to Protect - and Boost - Your Credit Score

Your credit score just may be the most important three-digit number in your financial life. That FICO score will help determine everything from how much interest you pay on a car loan to whether you qualify for a mortgage. Some employers even factor applicant credit scores into their screening process.

If your credit score could use a boost, there are steps you can take to improve it. And if your credit score is already stellar, there are things you can do to keep it in its elevated state. Here are some simple ways to maintain, and possibly even improve, your credit score fast.

Pay Down Your Debt

The most effective thing you can do to improve your credit score, and the rest of your financial life, is to pay off your existing debt. If you cannot pay off your debt completely, pay off what you can and keep working until it is all gone. The amount of credit you have outstanding is a major factor in determining your credit score, and reducing that utilization rate can have a profound, and incredibly positive, impact on your credit score. So do yourself a favor and work hard to put that old debt to rest.

Put Your Bill Payments on Automatic

A single missed payment or late bill could undo months of hard work improving your credit score. A history of on-time payments is one of the biggest factors in boosting your credit score, and you do not want to miss out on the opportunity. If you want to avoid inadvertent mistakes that could cause your credit score to plummet, why not put your payments on automatic? Setting up automatic payments from your bank account can simplify your life and virtually eliminate the chance of a missing payment or late fee showing up on your credit report.

Check Your Credit Report for Errors

Credit reporting agencies play a vital role in the economy, helping to determine how banks distribute their money and impacting the lives of millions of borrowers. It is surprising, therefore, that so many of the reports these agencies prepare are full of errors. If you assume that your credit report is free of costly mistakes, you could be in for a rude awakening. If you want to protect your good name and improve your credit score, start by checking your credit report for errors. You may be surprised at what you find. Once you identify a potential error on your credit report, let the reporting agency know about it right away. They will review the information and remove it if it is truly in error.

Keep Your Credit Clean and Wait it Out

Once you have paid down your existing balances, put your future payments on automatic and scoured your credit report for mistakes, there is only one more thing to do. Now that you have done all you can, let time do its magic. Over time, the impact of past mistakes will start to fade. Negative information will begin to fall off your credit report, and the positive steps you have taken will begin to be rewarded. As the months and years go by, you should see your score rise slowly but surely, so you can enjoy the benefits of a stellar credit rating once again.

Your credit score plays a vital part in your financial life, and you should treat it with the respect it deserves. Whether your credit score is already perfect or in need of some repair, the steps outlined above can help you make the most of it.

Trying to get credit in the first place? Check out How to Get your First Credit Score.

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