Credit score

4 simple steps to improve your credit score

FICO score, VantageScore, scores, scores, scores.

You may already know that credit scores come in many different shapes and flavors. And you’ve probably heard that having a good credit rating is important. But did you know that there are surefire ways to get a good score or improve one…no matter who does the scoring or what scoring methodology is used?

It’s not rocket science, but simple doesn’t necessarily mean it’s easy. Here they are: Four simple steps to a better credit score.

  1. Be in the game. To improve your credit score, you must have one. It usually starts with getting a credit card or loan from an institution that will report it to the credit bureaus. It can start with being an authorized user on your parent’s card or with an easier-to-acquire store card. For credit newbies, a secured credit card could also be a good way to get into the game.
  2. To be on time. Your credit score is designed to inform potential lenders of the risk involved in lending you money. Will you pay them back or just take the money and run away? For this reason, you’ll want your payment history to be spotless no matter what scoring model you’re using. Never, ever, ever be late with your payments. Be on time every time…and better yet, pay early.
  3. Be debt averse. Did you know that you can demonstrate your solvency by showing moderation? As backward as it sounds, if you use too much of the credit granted to you at any given time, you’re hurting your score rather than helping it. So don’t keep balances on credit cards or lines of credit, and if you do, keep the balance below 20% of what’s available. You need to be in the game, but not up to your ears.
  4. Be patient. Credit history includes the word the story For a reason. Potential lenders want to know that you’ll be a good borrower in good times and bad, and building or rebuilding that image of reliability takes time. Who cares if you’re a good borrower for a month? But a few years or a decade? It’s more important.

If you want to explore the fine print on how credit scoring works, check out the information available on the FICO and/or VantageScore websites and at the USAA Advice Center. But if you’re not interested in the details, faithful execution of these tips should get you headed in the right direction.

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