A good credit score is the heart of a healthy financial Life. Your credit score is solid indicator of how financially stable you are, and it is what most banks or lenders use your score to help them decide if they’ll approve you for anything from a home loan or a credit card.
In other words, it’s a big deal.
Credit Karma explains, “a credit score is a three digit number calculated from your data-rich credit report and is one factor used by lenders to determine your creditworthiness for a mortgage, loan or credit card. Your score can affect whether or not you are approved as well as what interest rate you are charged.”
If you don’t know your score, you can’t do anything to improve it or to maintain it. And it’s not enough to just know your score once and then forget about it; you need to check it regularly. Financial expert and NBC Today Show financial editor Jean Chatzky argues that it’s important you don’t just know what your credit score means, but that you also check it on a regular basis throughout the year.
“Personal finance gurus often recommend pulling one report every four months so you’re regularly tracking your records,” says Chatzky. She goes on to say, “Either way, checking your credit reports is a smart move when you consider that information from your credit report determines your credit score.”
We’re aware that when it comes to your finances, understanding all of the opportunities and risks can be a bit overwhelming. Ok fine, it’s a lot overwhelming. But it’s also a crucial step toward achieving a healthy fiscal life for you and your family. Learning how to improve your credit score is actually easier than you might think. All it takes is a few small tweaks to your spending habits, and educating yourself about how your financial practices can help (or hurt) your score.
Here are 8 easy things you can do right now to help raise your credit score and fulfill your financial dreams.
If you want to raise your credit score, you need to know what your credit score is, and understand how you got that 3-digit number. Which means you need to request your free credit report from annualcreditreport.com. It’s easy to do and you are entitled to one free credit report per year from each of the three major credit bureaus (TransUnion, Equifax, and Experian). Which means you can get all of these reports at once, or if you’re smart, you can spread those reports out every four months.
Know What a Good Credit Score Is
Once you have your score and your free credit report, you need to become familiar with what is considered a good credit score. According to Credit Karma contributor Jenna Lee, “credit scoring models typically range between 300 and 850. A good score depends on your needs. For example, a FICO score of 720 can land you decent loan interest rates, while 650 may help you secure a credit card.”