Tips to Improve Your Credit in 2020

From Tiffany Linares, Financial Aid Services.

1. Review Your Credit Report

Did you know that you can check your credit report for free? Each year you are entitled to request a free credit report from each of the three reporting agencies. Requesting your credit report will not affect your credit score in any way. 

2. Set Up Payment Reminders

Don’t forget to pay your bills. Write down payment deadlines for each of your bills in a planner or calendar. You can even set payment reminder alerts in your digital calendar. 

3. Contact Your Creditors

If you miss payment deadlines or cannot afford your monthly bills, make sure to contact your creditors immediately. Quickly addressing the problem can possibly ease the negative effects.

4. Apply for New Credit Sparingly 

You need credit in order to build credit. However, opening too many new accounts in a short period of time can hurt you.

5. Don’t Close Unused Credit Card Accounts

The age of your credit card accounts matter. Do not close your unused credit cards even if you do not plan to use them. Close younger accounts if you must. 

6. Pay Down “Maxed Out” Credit Cards First

If you have multiple accounts, pay off the account that has an owed total closest to the max credit limit. This will bring down your credit utilization rate. 

7. See If You Qualify for a 0% Interest Card

With good credit, you could potentially qualify for a credit card with 0% interest. These credit cards usually come with specifications such as a transfer balance fee or the zero percent is only good for 12-18 months. You could transfer a current debt that has interest rate onto the new zero interest rate card and pay it off in the 12-18 months. 

8. Consider a Debt Consolidation Plan

A debt consolidation plan can cause a temporary drop in your credit score BUT if you make on time payments, your score can quickly improve. You will ultimately be eliminating the debt that got you into trouble to begin with.