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How To Establish a Good Credit Score

If you’re looking to establish a good credit score, then you’ve come to the right place. In this blog post, we will discuss some of the best ways to build up your credit and improve your credit rating. We’ll cover everything from paying your bills on time to getting rid of any existing debt. So whether you’re just starting out or you’re looking to boost your current score, read on for our top tips!

Good Credit Score

Pay Your Bills On Time

One of the most important things you can do to establish a good credit score is to pay your bills on time. This means making all of your payments, including credit card payments, mortgage or rent payments, and utility bills, on time each month. If you’re unsure when your bills are due, set up reminders in your phone or calendar so that you don’t forget. For example, you could set a recurring monthly reminder for each of your bills. By staying ahead of your payments, you’ll avoid late fees and penalties, and you’ll also start to build a good history of on-time payments. 

Get Rid Of Any Existing Debt

If you have any existing debt, whether it’s from credit cards, loans, or anything else, it’s important to start paying it off as soon as possible. The reason is that debt can have a negative impact on your credit score, even if you’re making all of your payments on time. So if you want to improve your credit rating, focus on paying down your debt. You can do this by making extra payments each month or by consolidating your debts into one loan with a lower interest rate. Or, you can even try negotiating with your creditors to get a lower interest rate or waived fees. 

Good Credit Score

Apply For A Credit-Builder Loan

If you’re looking to improve your credit score, one of the best things you can do is apply for a credit-builder loan. We asked the team behind MoneyLion, a credit builder app, for their top tips on credit-builder loans and how they can help improve your score. “Credit-builder loans are designed to help people build or rebuild their credit,” they state. “The way it works is you make payments on the loan each month, and as you make on-time payments, it helps to improve your credit score.” However, it’s important to note that not all credit-builder loans are created equal. So be sure to do your research and compare offers before you apply. 

Sign Up For A Secured Credit Card

If you’re looking to build up your credit, one of the best things you can do is sign up for a secured credit card. A secured credit card is a type of credit card that requires you to put down a security deposit, which is usually equal to your credit limit. The benefit of a secured credit card is that it can help you build or rebuild your credit because it reports to the major credit bureaus just like a regular credit card. Just be sure to make all of your payments on time and keep your balance low to avoid damaging your credit. 

Don’t Open Too Many Accounts At Once

When you’re looking to improve your credit score, it’s important to be strategic about the accounts you open. That means that you shouldn’t open too many accounts at once. If you do, it could look like you’re trying to take on too much debt, which could hurt your score. Instead, space out your applications so that you’re only opening a few accounts every six to twelve months. And when you do open new accounts, be sure to keep them in good standing by making all of your payments on time and keeping your balances low.

Keep Your Old Accounts Open

If you have old credit accounts that you don’t use anymore, it’s generally a good idea to keep them open. That’s because closing an account can actually hurt your credit score. So even if you don’t use the account, it’s still beneficial to keep it open if it doesn’t cost you too much. For example, if you have an annual fee for the account, it might not be worth it to keep it open. But if there’s no fee, then it’s probably best to leave the account open.

By following these tips, you can start to establish a good credit score. And once you have a good credit score, you’ll be able to get better rates on loans, credit cards, and more. So it’s worth taking the time to build up your credit. And who knows, you might even thank us.