Improving Your Credit

If you have less than perfect credit, it might feel like there’s nothing you can do about it.

We understand that if feels like a slow and overwhelming task to improve your credit. It is possible and we want to help you. Here are some bits of advice…


Get organized

Harris Interactive reports that 23 percent of adults say they pay bills late (and incur fees) because they lose them. Sound familiar? Not only do you end up paying late fees, but you hurt your credit rating every time a bill hits the 30 day late mark.

The easiest way to improve your credit is to pay all your bills on time… every time. That might mean you have to put a little effort into getting organized. Try putting a basket or file folder near where you sort the mail and keep bills separate from other mail so you don’t lose track of them. Mark the due date on the outside of the envelope and file by due date order so you can quickly see what needs to be paid next. You can also use our free online Bill Payer to set your payment to automatically come out of your account before it’s due.

If having the funds to pay those bills on time is the issue, see your credit union for some advice. Maybe you need some help with your budget – here’s some budgeting information for you. Perhaps debt consolidation is something else to consider. Check out our Debt Management advice with helpful calculators.


Are credit cards evil?

Some people think credit cards are to blame for poor credit. And it’s true that charging too much on your credit cards — or paying them late — does damage your credit score. But using credit cards the right way actually improves your credit score. As a rule of thumb, try to keep your credit card balance to less than 30% of the credit limit on the card. For example, if you have $10,000 in credit limits, try not to let your balance get above $3,000. Even better, use credit cards for convenience and try to pay them in full every month. It looks good to the credit bureau and improves your credit score.

CREDIT CARD PAYOFF CALCULATOR – Use this calculator to see what it will take to pay off your credit card balance, and what you can change to meet your repayment goals.


Don’t go overboard cleaning up your credit report

Everyone gets a free copy of their credit report each year. We encourage you do this and look for fraudulent activity and inaccuracies.

Some people say that you should close old credit cards if you’re not using them. That’s not true! If you have had a credit card for a long time, keep it open. The date the card was opened will stay in your credit file as long as it’s active. The longer your credit history, the better your credit score.


Careful about where you get your loans

Another tip is to avoid using a finance company (any lender with the words, “Finance” or “Financial” in the name). The credit bureau looks at these as “lenders of last resort” and dings your credit score for using these types of firms. Many businesses that offer “12 Months Same as Cash” use finance companies to provide the funds. Pay those loans off through your credit union and get that record off your credit bureau file.


Try out these tips and get yourself on the road to having an excellent credit score. Let us know if we can help!



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