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For some people, managing their credit score is similar to playing Whack-A-Mole. You address one issue and another one pops up. It can be a terribly frustrating cycle that never seems to have an end.

In my job as a loan officer with Total Lending Concepts, I have found there are three distinct groups of folks when it comes to credit scores:

1 — People who have no idea what causes their credit score to get worse or get better.

2 — People who have some idea about what helps and hurts their credit score, but don’t think they have the ability or the resources to see any improvement.

3 — People who know what the causes of a good or bad credit score are, and work intentionally to check the boxes on the path toward a good score.

Let’s talk a little about the functional ways to improve your credit score or to make sure your score continues to stay in a good spot.

Pay Your Bills on Time

This is a big one. U.S. News & World Report estimated that a single late payment can lower a credit score by 100 points or more.

The good news…missing a payment by just a few days likely won’t put your scores at risk.

The bad news…paying bills 30 or more days late can have a serious effect on your credit.

Keep Balances on Credit Cards / Lines of Credit Below 30%

 

According to FICO, the amount you owe is the second-most-important factor after on-time payments. Just owing money isn’t an issue. Owing too much relative to your capacity of credit can be.

The key to this one is to start somewhere. If you are at 100% credit utilization, try to get it to 70%. Then shoot for 50%…and then just keep going. As that number goes down, your credit score will go up.

Don’t Make Too Many Credit Inquiries

 

This one is self explanatory. Multiple credit inquiries in a short period can have a long effect on your record. But keep in mind that in certain situations, like buying a car, you can have multiple applications within a smaller timeframe without your credit score taking the hit.

There are plenty of other tricks and tips to help you keep your credit score where it needs to be. Reach out to me today at tim.rich@tlclender.com to learn more or to find out if your credit score is ready for that next big purchase.