Your entire life has revolved around credit: class credit, extra credit, credit for a job done well or for going the extra mile. It only makes sense that this 6-letter word be an integral part of adulthood. Good credit – which starts around 760 – is a must when it comes to making large purchases such as a home or car. To keep yours in check, follow these simple steps from Alexa von Tobel, Cosmopolitan columnist and CEO of Learnvest.com.
- Check your credit
“At least 25 percent of credit reports contain errors,” von Tobel says. “Make sure to check yours yearly.”
- Pay bills on time
“Your score can plummet if you forget to pay a bill, whether it’s your credit card, parking tickets or a hospital invoice,” she says. “If your number is 780, one 30-day late payment can reduce it by up to 160 points!”
- Avoid carrying debt
“Racking up month-to-month debt on your cards costs you two ways — you’ll spend a fortune in compounding interest, and it can lower your score.”
- Don’t max out your credit card
“Spending more than 30 percent of your available limit can lower your score,” von Tobel says. “Call and ask for a credit-limit increase if you need wiggle room, or open one more card to spread out charges.”
- Limit your number of credit cards
“Don’t go too crazy applying for every store card that offers a 20 percent discount,” she says. “Each new line of credit dings your score by an average of 5 points.”
It’s never too late to raise your credit score. Following these guidelines can raise your credit by up to 50 points per month, bringing you closer to that dream condo you’ve always wanted.