BATON ROUGE, La. (WAFB) - Pelican State Credit Union says customers reach out with lots of questions about credit scores, so director of financial outreach, Jessica Sharon, talked with WAFB to breakdown the dos and don’ts of getting your score on the right track.
The very first rule of a good credit score: Pay your bills on time. Don’t sweep your debts under the rug.
“Always, always, always pay your bills on time. Thirty-five percent of your credit score is do you pay your bills on time,” said Sharon.
Another 30% of your score comes from keeping your balances low. Just because you have the money available doesn’t mean you need to spend it all.
“Do you have credit and are you managing it wisely? You have the available credit, but you aren’t racking up a lot of debt,” she said.
Manage your debt wisely is one of Sharon’s big points. Ask your bank or an advisor to teach you how to deal with debt on your own. For example, Pelican offers free credit counseling.
Don’t hire a non-reputable credit repair company because you think they’ll wipe your bad credit clean.
“Many, and I’m not going to say all, but many of those companies, the way they improve your credit score is by disputing everything on your credit report,” Sharon said.
Sharon says it doesn’t look good when the credit bureau sees you dispute too many items on your report. Don’t waste your money on a quick fix. Use that money to pay your bills.
Another 15% of your score comes from credit history. The longer a credit card stays open, the better. Put little things on a card to keep it active instead of closing it altogether.
“I always tell people, you got to buy gas. You got to buy groceries. Purchase what you already have to buy that’s not already outside of your budget and then just pay it off,” said Sharon.
The last little chunks of your score are broken down into 10% from inquiries and 10% from credit mix. You don’t want to ding your credit often, but you do want to have different types of credit in your history.
These are just the basics to better define your credit character.
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