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Three Steps to Improve Your Credit
Special to The Truth
Good credit is a key
ingredient in succeeding financially; yet building a strong
foundation takes time. If you are new to credit or are
working to improve it, there are many steps you can take to
put you on a path to stronger credit.
Here are three essential
steps that help you get started:
• Check your credit
report: Experts recommend checking your credit report at
least once a year. Your credit report contains details of
your credit history, including balances, credit limit and
payment status. Lenders, apartment managers and some
employers may check your credit report to see how
responsible you are with money.
When you check your
report, make sure it contains current and accurate
information. If you find errors, correct them as soon as
possible because they may negatively impact your credit
score and even indicate possible identity theft. You can
request a free copy of your credit report from each of three
major credit reporting agencies -- Equifax, Experian and
TransUnion -- once each year at www.AnnualCreditReport.com
or call toll-free 1-877-322-8228.
• Make sure you’re paying
your bills on time: Life happens and you may find yourself
forgetting to pay a bill on time. Because your payment
history is one of the biggest factors in your credit score,
it’s important that you stay organized and keep track of all
your bills. This applies to more than just credit card
bills, but also when it comes to rent, utilities and cell
phone payments.
Using free online tools,
often available through your financial institution’s online
banking, can help your develop a budget and create an
automatic bill payment schedule. Many financial institutions
also allow you to change your payment due dates for one that
is convenient for you. If it helps, you can organize all
your payments to be due on the same day of the month.
• Make a budget and stick
to it: One of the best ways to keep up with your bills is to
closely monitor your spending. Creating a budget can help
you decide when to use credit and when to hold off on a
purchase. Keeping a budget is also helpful because lenders
look at the amount of debt a consumer has compared to their
income.
As an important rule of
thumb, keep debt at no more than 35 percent of your income
or lower. This will tell lenders that your debt is at a
manageable level relative to your income, and you are likely
to have money left over for saving or spending after you pay
your bills.
In addition to the steps
listed above, there are many free resources available that
can help you improve and manage your credit. Wells Fargo
recently launched Path to Good Credit, a new website that
offers videos, tips, quizzes and infographics that
illustrate how good credit can help consumers succeed
financially. For more information, visit www.wellsfargo.com/buildcredit.
Take steps now to improve
your credit for a solid financial future.
Courtesy StatePoint |
