Boosting your credit score can be as easy as 1,2,3….but only if you start early!  Here are three simple steps you can take right now to get started on a great credit score:

  1. Eliminate credit card balances
  2. Leave old debt on your credit report
  3. Pay bills on time

If you have a low credit rating and want to boost it be patient because it won’t happen overnight.  A good credit rating is something that’s acquired over time much like a good driving record.  It could take years to boost your rating to the level you’re aiming for.  If you’re young and have no credit rating you need to build up good rating based on what you do today.  If you have a bad credit rating already that’s based on your past actions there are a few things you can do to boost your rating.  Here are a few tips to boost a low credit rating or simply maintain an already high credit rating:

  1. Pay off all credit card balances no matter how small.
    If you’re in a position to pay off all remaining balances on your credit cards you should do so. If that’s not possible for you at the moment consider consolidating all your debt so you’re making one manageable payment a month instead of several. Eliminating credit card debt no matter how small is crucial because your score considers how many of your cards have balances. Remember: no amount is too small to affect your overall credit score. Once your credit card balances are all paid off, eliminate the smaller cards and stick with just one or two to keep from having several balances in the future. If you’re having a hard time living within your means and find you’re using your credit cards all the time some budget planning could easily get you back on track. (link to WEALTHplan budget planner)
  2. Good Debt is Good
    Most people will quickly try to remove all debts paid off from their credit record but the truth is that good debt such as paying off your mortgage is good debt. A long history of good debt (debt you’ve paid off responsibly) is good for your credit record and will boost your rating.
  3. Pay Your Bills On Time
    No matter how small or large paying your bills on time is always a good idea. Regardless of the size of your savings account your credit rating takes into account how responsibly you’ve paid your bills and could result in whether you get that mortgage for your dream home or not. The bottom line – Don’t sacrifice paying your bills on time because you’re saving for a big purchase!
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