Mariana took action to boost her credit score. You can too.
Credit debt gave her the same feelings as everyone else – confusion and concern, but most importantly determination to improve it. Mariana set out on a long-term plan to increase her credit score, lower her debt, and put herself on a better financial footing for the future. Here are the 3 big steps she took, and that you can copy today, to improve her score.
1) Set Up Payment Reminders
Paying the minimum payment on your credit card consistently and on time is one of the largest determinants of your credit score. While your statement comes every month, life gets in the way for everyone and can make it easy to forget to pay. Setting a payment reminder helps reduce the chance of you forgetting. Bonus: many cards offer the ability to automatically deduct your payment from your bank account every month. This makes it even easier, just make sure you always have enough money in your account or you may face expensive overdraft fees.
2) Lower your outstanding balance
This one may seem obvious, but many times its also the hardest to do. Banks like to see you using as little credit as possible, or have as small of a debt balance as possible. If you have a lower debt balance, banks think you are safer and are then more willing to lend you more money at lower rates. Lowering your debt requires you to create a budget and pay more than your minimum payment every month. While this may sound daunting, small steps over time can make a big difference.
3) Don’t have too many different credit cards
When you feel lost in credit card debt, it can seem easier to just open a new card than working to pay off your current cards. You may think that more cards would be better, but the banks typically see this as a negative. The best strategy is to have a few different cards and manage them effectively. Continuously opening accounts to transfer balances signals you may have money issues and might actually lower your score and make it harder to open new accounts in the future.
Increasing your credit score takes time. This doesn’t happen overnight. However, with proper strategies and hard work, improving your credit score is 100% possible.
You might also like: Sofia Canceled Netflix. Should You?