CCOA offers tips on how to improve credit
Many people pinch their pennies by doing things such as using coupons and not leaving their water running for very long. But one thing that can save you a lot of money is improving your credit. Better credit means a better credit score, and a better credit score means better interest rates on your credit cards, home and car loans, which can save you literally thousands of dollars.
The majority of your credit score – 65 percent, in fact – is based on your payment history and how much debt you owe. So to improve your credit, it is absolutely vital to pay on time and to pay down your debt. Your Fair Isaac & Company (FICO) credit score ranges from 300 to 850 – the higher, the better. If you’ve never used credit, you shouldn’t have a credit score. If you have rarely used credit and barely have any credit now, your score probably isn’t very high. FICO, the leading credit scoring company, likes that you have credit and that you use it.
Avoid going to a credit repair clinic to fix up your credit. At best, they take your money for things you can do yourself, such as disputing errors. At worst, they make false claims such as being able to remove accurate negative information off of your credit report. And they usually charge expensive fees. Instead, go to www.annualcreditreport.com which is the website where you can go under federal law to receive a copy of your credit report for free every year from Experian, Equifax and TransUnion. You will be given the option to purchase your credit score for a small fee if you wish to receive your score with your credit report. If you buy your score, you can see how it compares to the national average and receive tips on how you can raise your score.
Credit Counseling of Arkansas (CCOA) offers other tips on how to raise your credit score:
* Owe less than half of your credit card’s credit limit –If you owe $1,000 on a credit card with a $2,000 credit limit, you think you’re doing well: You’re not over the limit and you’re not maxed out on the card, but FICO will lower your credit score. Strive to owe less than 30 percent of your credit limit.
* Apply for credit sparingly. Every time you apply for credit, it takes a few points off your score. Plus, having a lot of new credit lowers the average age of your accounts and hurts your score.
For a free budgeting and credit counseling session, consumers can contact CCOA at (800) 889-4916 or go online to www.CCOAcares.com. CCOA’s Debt Management Program can lower interest rates and lower monthly payments to help debtors become debt free.
Benton resident. Rogue journalist. Recovering attorney. Email = Ethan@FirstArkansasNews.net.