4 Tips for the Best Credit Score

Just as your license is the part of your identity that allows you to drive, your credit score is just as big a part of who you are. It can affect your ability to take out mortgages or student loans, what type of credit card you can get, and the amount of interest you’ll pay on lines of credit. With that being the case, you’ll obviously want to have the best credit score possible. Here are four tips to doing so!

1. Keep Track of Your Credit Card Balances: About 30% percent of your credit score depends on how much credit you have compared to how much you’re using. The smaller you can get that percentage, the better your credit score will be, so pay down your card balances and keep them as low as possible. Aim to have your percentage go no higher than 30%.
2. Leave Old Debt on Your Credit Report: Contrary to popular belief, leaving old, paid-off debt on your credit report is actually a good thing. It shows you’re a responsible borrower and can be trusted to handle other lines of credit. A long history of good debt can help improve your credit score moving forward.
3. Pay Your Bills on Time: We know that making big purchases, such as a car or home, can leave you feeling frazzled to gather a large amount of cash. However, don’t let your regular bills suffer for it. Paying your bills late can cause your credit score to drop, ruining your plans of owning that dream home. No matter what, make sure to make regular, on-time payments each month to keep your credit score up.
4. Become an Authorized User on Someone Else’s Card: If you’re not able to open your own credit card, find a family member or friend who is willing to let you become an authorized user on their account. His or her responsible payments will help boost your credit score, and that card’s limit will add to your existing credit limit, helping reduce your credit utilization ratio. The best part is you don’t even have to use the card to reap the benefits!

If you’re interested in improving your credit score, meeting with a financial advisor can help! At American Investment Planners LLC, we make it a priority to help you prepare for the best financial future possible. From investments to estate planning, we’re here to help with anything you may need. To schedule an appointment with one of our advisors, please call (516) 932-5130 or email info@americaninvestmentplanners.com.