How to Maintain or Repair Your Credit Score

The best ways to establish good credit

Did you know that every financial decision you make could impact your credit score? This can affect your ability to get a job, a loan, credit cards, basic utilities and services, or rent an apartment. By making good financial decisions, lenders and businesses will recognize you as low-risk. You'll be more likely to receive financial opportunities, including higher credit limits and lower interest rates.

How to Build a Strong Credit History

  1. Start early. The length of your credit history is a key factor in determining your credit score.
  2. Start small.
  3. Open store charge cards or credit cards to build credit.
  4. Pay your balance in full each month or keep your balance low.

If you don't qualify for a store charge card or credit card, open a loan secured by funds held at the bank, such as a CD, to establish a credit history. Before opening a loan, confirm your payment history will be reported to the major credit reporting agencies.

Other strategies include having someone cosign on your account or installment loan. You can also become an authorized user on a family member’s account. Credit activity on the shared account will be reported in the primary cardholder's name and may be reported in the authorized user's name. It’s important to use caution as poor decisions may affect both you and the primary account holder. Make responsible decisions with your credit cards and loans. Be sure to pay bills on time. All unpaid bills, including credit card, medical, cell phone, etc. will appear on your credit report and negatively impact your score.

How to Rebuild Your Credit Score

  1. Review your credit report. Regularly review your report for unauthorized activity, errors and unpaid bills, and report issues or discrepancies immediately.
  2. Create a plan. Develop a timeframe and budget for paying off current debts. Contact all creditors. If possible, set up payment plans.
  3. Pay bills on time. Paying on time will positively impact your credit score.
  4. Use caution when closing accounts. It may negatively impact your credit score by shortening your credit history or decreasing your total available credit.

Use caution if creditors offer to "reduce" or "skip" payments. Although paying any amount, however small, is better than not paying at all, reduced payments may negatively impact your credit score. To save money, try paying off delinquent accounts first, followed by debts with higher interest rates. Talk to one of our loan experts about a debt consolidation loan to pay off higher rate credit card balances. This can save you money and allow you to pay off debts sooner.

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