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 score is important. But did you know that there are sure-fire ways to score or improve one… no matter who is doing 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.
- 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. This can start with being an authorized user on your parents’ card or with an easier to acquire store card. For those new to credit, a secured credit card could also be a good way to get started in the game.
- To be on time. Your credit score is designed to let potential lenders know how risky it can be to lend you money. Are you going to pay them back or just take the money and run away? For this reason, you’ll want your payment history to be impeccable, regardless of which scoring model you use. Never, ever, ever be late with your payments. Be on time every time … and best of all, pay early.
- Be reluctant to take on debt. Did you know that you can demonstrate your solvency by showing restraint? As backward as it sounds, if you use too much of your credit at one point, you will hurt your score rather than help it. So don’t carry over balances on credit cards or lines of credit, and if you do, keep the balance below 20% of what’s available. You have to be in the game, but not up to your ears.
- Be patient. Credit history includes the word the story For a reason. Prospective lenders want to know that you will 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 is a more important matter.
If you would like to learn the details of how credit scoring works, check out the information available on the FICO and / or VantageScore websites and in the USAA Advice Center. But if details aren’t your thing, faithfully executing these tips should point you in the right direction.
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