Lenders uses your credit score to determine if you qualify for a loan, so before you go searching for a home, it’s best to understand your credit score. Here are 6 ways to raise credit score in Tacoma, WA.
6 Ways to Raise Credit Score in Tacoma, WA
Pay Your Bills On Time
Paying your bills on time seems like the most straightforward tip, but can easily slip your mind. When your life is busy and you have a million other things to think about, it’s easy to forget to pay a bill. Paying your bills on time has the biggest impact on your credit score at 35%. A tip on how to always pay your bills on time is to enroll is auto-pay for your credit cards, utilities, miscellaneous bills, cell phone bills, and any other revolving payment. Some companies will also reward you by giving you credit toward your future bills if you sign up for auto-pay.
Frequently Check Your Score
The best way to always stay informed on your credit score is to frequently check your score on a site such as CreditKarma or Credit Wise. These sites give you an accurate estimate of your score, as well as areas of strength and improvement. For example, if you missed a payment last month, these sites will tell you exactly which payment you missed and when it was due. Keeping an eye on your credit score holds you accountable and allows you fix errors right away.
Keep 50% to 70% of Your Credit Limits Available
Revolving credit availability makes up 30% of your credit score. For example, if you have a $10,000 limit on your credit card, you should keep the balance under $3,000 or less. At $5,000 it will affect your score. If there is a month when you need to charge more on your card, just make sure to pay it right away so it doesn’t negatively impact your credit score.
Keep Old Credit Cards Open
As much as it seems like just another card in your wallet, it’s good to keep old credit lines open and can help you raise credit score in Tacoma, WA. Having 100% availability on a card will help improve your credit score. When you close an account, it negatively affects your credit score. So a good tip is to use your old cards at least once a year, and pay it off when it’s due. This way the credit grantor won’t close the account.
Limit Opening New Accounts
Inquiries make up 10% of your credit score and the age of your accounts make up another 15%. Opening multiple credit lines at once could dramatically drop your score. If you are looking to purchase a new car, consider going to your own bank for financing instead of using the car dealership’s preferred lender. It’s common for new homebuyers to open multiple credit lines once they move in (for appliances, cars, electronics, etc.), just be aware of how many you’re opening and how each pull affects your credit score.
Think Twice About Co-Signing
Just think, if the main grantor forgets to make payments on time, it will affect your credit score too. Be confident in your co-signer and create a plan for paying bills on time. Considering this is the largest area of your credit score, it’s important to talk through a plan with your co-signer. A monthly reminder in the calendar is always a good idea as well.
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