NDSU Extension Service - Ramsey County


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Boosting Your Credit Score

Boosting Your Credit Score


            Credit scores affect whether we are eligible for a loan we might apply for and for the rate of interest we will pay.  Lower scores equal higher interest rates and more cost to you, the consumer, over the long run. A few easy steps can move your score in the right direction.

            1. Watch those credit card balances: One major factor in your credit score is how much revolving credit you have versus how much you're actually using. The smaller that percentage is, the better it is for your credit rating. The optimum: 30% or lower. To boost your score, pay down your balances, and keep those balances low.

            2. Check the calendar. If you're shopping for a home, car or student loan, it pays to do your rate shopping within a short time period. Every time you apply for credit, it can cause a small dip in your credit score that lasts a year. That's because if someone is making multiple applications for credit, it usually means he or she wants to use more credit. However, with some types of loans -- mortgage, auto and more recently, student loans -- scoring formulas allow for the fact that you'll make multiple applications but take out only one loan.

            3. Pay on time. One of the biggest ingredients in a good credit score is simply month after month of on-time payments.  Credit scores are determined by what's in your credit report. If you're bad about paying your bills -- or paying them on time -- it damages your credit and hurts your credit score,

Saving money for a major purchase is smart. Just don't slight the regular bills -- or pay them late -- to do it.

            4. If you have missed payments, get current and stay current. The longer you pay your bills on time after being late, the more your FICO Scores should increase. Older credit problems count for less, so poor credit performance won't haunt you forever. The impact of past credit problems on your FICO Scores fades as time passes and as recent good payment patterns show up on your credit report. And good FICO Scores weigh any credit problems against the positive information that says you're managing your credit well.

            5. Check your credit score Request your credit reports from Equifax, Experian or TransUnion at Request at: www.annualcreditreport.com

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