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10 Tips to Improve your Credit Score in 2020

Now that you’ve learned a few ways to clean up your habits and improve your credit score, we have some other tips you can employ to make some long term improvements.



Here are 10 ideas you can use to get your credit and scores in tip-top shape for 2020:


1. Know your financial goals for 2020


Once you have goals, it’s much easier to develop a plan that will get you where you want to go. Whether it is to buy a car, buy a home or just qualify for a great rewards credit card, your credit score will play a big role. Once you have a goal, you will get there as quickly as possible.


2. Know where you stand financially


Coming up with a spending plan you can live with requires that you have the money to make those payments on-time. Great credit and a great score start with managing your payments. Figure out your income and all of your expenses and see what is left to make at least one of those dreams come true this year. Try tracking your expenses for a while if you can’t tell where your money is going each month.


3. Know what you owe


Get a copy of your credit report. The clock starts over on Jan. 1 for your opportunity to score your annual free copies at AnnualCreditReport.com. Federal law entitles you to one free credit report from each of the three reporting agencies every year. Additional free reports can be had if you are turned down for credit or are charged a higher rate due to information used from your credit report. Some states allow you free reports more than once a year, so check with your state to see if you are entitled to more.


4. Know your score


Several credit cards and websites offer free access to check your credit scores. If you have access to one of these, be sure to take advantage of the service. The federal free annual credit report law only applies to free credit reports, not free credit scores. If you don’t have a card or other service that will give you your score free, you will have to pay for the score. If you are planning a purchase that will require a certain level of scores, like a mortgage or new car, this is a worthwhile expenditure that should be made about six months in advance to allow for any corrections to your credit file. If you need help with this, Ramsey Credit Service is a great choice!


5. Know what is important to your score


The most important factor is payment history because 35 percent of your score comes from this one category. If you haven’t done so before, make 2020 the year you pay your bills on time, every single month of the year. Tip is to enroll in online payments. This way, you can set up a payment as soon as the bill arrives and it will go out when it is due. No more forgetting to mail a check or burying a bill in the mess on your desk!


6. Know your credit card balances


You should know both the total amount of debt you have, as well as how much is on each card relative to your credit limit. This is what is known as credit utilization, and follows closely behind payments in importance to your score at 30 percent. Those consumers with the highest credit scores keep their utilization in the 5-to-10 percent range. Check your card statement to find out what your credit limit is. It can change, so check periodically.


7. Know when you need to apply for credit and when you don’t


Opening new credit accounts or taking on new debt should be done carefully because 10 percent of your score comes from new credit. Additionally, every credit application you turn in will result in a small ding to your score via a hard inquiry. Too many dings can add up to one big deduction. If you are shopping for a home or car loan, you don’t have to worry. The credit scoring models will consider multiple loan inquiries like this as one if they are done over a relatively short period of time.


8. Know how old your accounts are


Separate from payment history is the length or history of your credit accounts. At 15 percent of your score, this category is not nearly as important as payment history, but the age of your oldest accounts is still important. Be cautious about closing accounts that you don’t use much because a longer positive history counts for extra points.


If you are concerned that an account will be closed by the creditor due to non-use, start using the card for things you plan to purchase anyway like gas or groceries. When the bill comes, pay it in full. This will keep the card active and keep you from adding to your credit card debt.


9. Know how to beef up your score two ways


First, if you are looking to add some points to your credit score, one area that is often neglected is credit mix. This scoring factor is worth about 15 percent of your score and can make a real difference in your overall score.


Lenders like to see a healthy mix of installment and revolving debt. Installment debt has a fixed payment and would be like your car payment, a furniture loan or your monthly mortgage payment. Credit cards are revolving debt that allows you to make only a minimum payment if you don’t want to or can’t pay the balance in full. Using credit cards wisely shows spending discipline. Being able to keep up with fixed as well as variable payments signals stable financial health.


Second, check out the Experian Boost program. The Boost program will give you credit for paying your utility and mobile phone bills that you already pay. If you have a limited or thin credit history or have a low score, adding these positive payments to your credit file could give your score a significant “boost.”


10. Know what not to do


Wanting to help a friend or family member is understandable, but if you co-sign you must be prepared to monitor whether payments are being made and be willing and able to take on the debt yourself should something happen to the other person. But remember to be very cautious about agreeing to co-sign for a loan or other credit account for anyone.


Remember, you are co-signing because a professional who makes a living giving loans has said they don’t believe the borrower can make the payments. If you think you know better, think again. If you are comfortable with that, by all means co-sign away. If not, see if there is another way you can help that does not involve your name (and credit) on their loan.










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