Repair your credit score this March


BUCKHANNON — March is National Credit Education Month, which means there is no better time to educate yourself and others on the importance of understanding the ins and outs of your credit score.

One in five Americans reportedly find errors on their credit reports and more than 90% of home and auto insurers use credit ratings to decide who to cover and what premiums to charge. These are just a couple of the many reasons why you should actively monitor your credit score, as well as educate yourself on how to properly manage it. Your bank, your employer, financial experts, and the internet can help you learn how to manage, build and improve your credit score.

As you explore the resources and events available to you this month, keep a few things in mind. Credit is an indication of your financial trustworthiness. Having “good credit” means your history of payments, employment and salary make you a good candidate for a loan, and creditors—those who lend money or services—will be more willing to work with you. While having “bad credit” can follow you for quite a while (as much as seven years), it is fixable. The key is to know the right steps to take to get your credit back on track.

Also, keep in mind that not every source is credible. Some credit card companies will present themselves as a great deal but upon closer inspection, the fees, interest rates, and other terms are not truly in your best interest. So, dedicate the necessary time to educate yourself on credit and your current credit situation. It will benefit you in the long run.

The following five tips can be used to help improve your credit score:

  • Pay bills on time - Past performance is a predictor of future performance, so pay all bills off timely—rent, utilities, loans and credit cards.
  • Keep debt to a minimum - Understand your credit utilization ratio which is the amount of debt you carry (total amount of credit balances) compared to your combined credit limits. Lenders like to see a credit utilization ratio of less than 30%.
  • Keep up the good work - The longer you can maintain a good credit rating, the better. Accounts that have been in good standing for a long time add to your credit score.
  • Open new credit accounts only as needed - Applying for credit results in a “hard inquiry” on your credit report, which has a negative impact on your overall credit rating that can last for up to two years.
  • Check your credit reports - If you find inaccurate information on any credit report, you can dispute the information to have it corrected.

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