The average US credit score is rising. Here’s what you can do to make sure your score is at its best. (iStock)
Credit scores are increasing in the United States. According to the Experian 2020 Consumer Credit Review, the average credit score has risen to a record high of 710 in the past year, which is a seven-point growth from 2019. Currently, 69% of Americans have a good credit score of 670 or higher . .
In fact, if you maintain a good credit score, you will be using a lot of personal finance, including the best interest rates when applying for new credit, insurance policies, and refinancing opportunities.
Read on for five simple tips to keep your credit score high, and if you want to know where your credit file stands, you can use it credibly to check your credit score without affecting it negatively.
5 BENEFITS OF HAVING A GOOD CREDIT SCORE
How to keep your credit score high
1. Manage your debt
The first key to improving your credit history is to pay off debt. If you are currently juggling different balances and payments, your debt consolidation may be considered a repayment strategy. Debt consolidation involves the use of a new loan to pay off all your existing accounts and streamline them into one monthly payment. Ideally, the new debt consolidation loan will also have a lower interest rate, which will save you money in the long run.
While it is also important to keep an eye on the number of new accounts and hard inquiries that appear in your credit report, you can actually take out an installment loan in the form of a debt consolidation loan if you have outstanding credit card debt balances. helps improve your credit mix, which counts for 10% of your total FICO score. Likewise, it can lower your credit utilization rate, which is 30% of your total FICO credit score.
Visiting credibly can help you compare debt consolidation options to find the best personal loan rates for you, based on your credit score and credit history.
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2. Pay on time
Once you have dealt with debt, you should do your best to make all your payments on time. The major credit reporting agencies agree that the payment history is one of the most important factors in determining a good credit score. For example, payment history accounts for 35% of your total FICO score and up to 40% of your TransUnion score.
With this in mind, it is essential that you make your payments on time every month if you want to avoid getting a bad credit score. If you need help remembering to make your payments on time, you can always set reminders or set up automatic payments from your bank account.
Not sure where you fit into the credit score spectrum? Then you need to use a credit monitoring service to track changes in your credit score. With Credible, you can set up a free service today.
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3. Keep old credit cards open
Many people think it is a good idea to close old credit card accounts that they no longer use. In reality, though, doing so can hurt your score. The length of your credit history (or credit age) is 21% of your TransUnion score and 15% of your FICO score. Therefore, it is a good idea for credit reporters to keep old credit cards open, even if you rarely use them.
If you do open a new credit card, keep in mind that it may require a lot of research, but the new credit line may increase your credit utilization if you keep your balances low. Credible can help you compare and contrast different credit card types so you can find the perfect fit.
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4. Monitor your credit
Next, it is important to regularly monitor your credit for signs of identity theft, fraud or other negative information. Simply put, if your personal information falls into the wrong hands, it can cause a disaster for your credit score. However, it is important to check your creditworthiness and credit reports regularly for errors (you can do this for free today at Credible’s credit monitoring partners).
If you see that some information in your credit report is incorrect, the first thing to do is file a dispute. If you dispute a credit report, write a letter to the credit reporting agency asking you to correct the relevant information. Then the credit reporting agency is given time to investigate the dispute and determine if a change needs to be made. In addition, if you suspect that you are fraudulent, you can request that a security freeze be placed on your report, which prevents creditors from accessing your report and prevents others from opening accounts in your name.
If you do not want to bother watching your report, you can always consider credit monitoring services. Credit Monitoring Services keeps track of hard or soft inquiries about your report and will notify you of any suspicious activity.
Check out some of Credible’s partners here to sign up for free credit monitoring. You can get instant alerts about late payments, fraudulent activities, credit changes and more.
HOW DO YOU CHANGE YOUR CREDIT SCORE?
5. Keep credit card balances low
Lastly, if your goal is to improve your score, it is important to keep your credit card balances as low as possible. Your credit utilization rate, which is the measure of the amount of credit you use versus the total available credit amount, is 30% of your total FICO score and 20% of your total TransUnion score.
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The conclusion
Credit monitoring is one of the most powerful things you can do to improve your credit score. Credibility can help you see where you stand without compromising your score.
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