Back in the day, “humans” were the ones who decided someone’s credit worthiness. All you needed was a handshake. But times have changed, and now a single number (your FICO credit score) decides whether you’ll get a loan or not.

75% of all financial institutions use the FICO credit scoring system. It was created by the Fair Isaac Company. You can go to Myfico.com, and get your credit reports and scores from all 3 major credit bureaus. They are Experian, TransUnion, and Equifax.

Your FICO score will determine how much credit your approved for and at what interest rate. So monitoring your credit score can help

you save on interest when applying for loans.

Improving your credit score, or maintaining it doesn’t have to be difficult. It will just take some time to implement some of the steps.

Here are three strategies to maintain or boost your credit score.

Strategy One: Establish a Credit History

There could be various reasons you don’t have a credit history. Maybe you’re fresh out of high school. Maybe you only use cash, and never needed a loan. Most likely, if you have no credit history, your FICO score will be low.

The easiest way to obtain a credit history, is through an installment loan. Paying an installment loan on time can improve your score faster than paying off a credit card.

If you have $1000 to work with, here’s a great way to establish a credit history. First, take $1000 to a bank, and open a 6 month CD account. Then, apply for an installment loan for $1000, using the CD as collateral. Now, here’s what you do. Take the $1000 loan, and open another 6 month CD at another bank. Get another loan for $1000 from the second bank. Do all the steps again at one more bank.

You will now have 3 loans to pay off. Pay the minimum amount for 6 months. In the final month, cash out your CD’s and pay the loans off in full. You will have established a credit history in just 6 months.

Strategy Two: Maintain Your Good Credit History

You have a steady job. You don’t have high credit card debt, and you pay your bills on time. Here are some tips to keep your credit score from going down.

First off, don’t close your old accounts. Closing old accounts will remove how much total credit you have available, and can lower your credit score.

Second, if you pay your credit cards in full, you may have to watch when you pay on them monthly. For example: You have a $5000 limit credit card. Every month, you charge about $1200 to that card, and you pay it off in full. But here’s what can happen to you. Your credit card company reports your credit info monthly to the credit bureaus. If they report it before you pay off your card, it can look like you carry a balance on your credit card every month. You may find that your FICO score will improve if you pay on your credit cards at a different time of the month.

Strategy Three: Repair Your Poor Credit History

If you have poor credit, there are some things you can do to boost your credit score. It will take some time to accomplish this.

The first step to repairing your credit is to pay all of your bills on time. You’ll want to establish a good payment history. Your mortgage is the most important to pay on time. Installment loans are next, and then credit cards.

After that, you need to reduce the percentage of credit that you are currently using. Paying down the revolving credit debt that you have will improve your credit score.

One last thing is to look for errors in your credit report. Get a copy of your credit report from all three major credit bureaus from Myfico.com. Look them over for any errors, and contact your creditors to remove any negative items.

Your credit score is vital to your financial health, and implementing these strategies may help boost your credit score. Please consult with a financial advisor about all concerns of your finances.

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