Energy Capital Credit Union

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Tips for Increasing Your Credit Score

Posted on: October 11, 2016

credit report ECCU

Credit is important. We all know that. What you may not know is how to increase your credit score. Here are a few simple tips to follow that will better your score and help you become an ideal borrower to lenders. And here’s a quick video you can watch.

Pay your bills on time

This one might seem like a no-brainer, but paying your bills on time is actually one of the most important contributors to having a good credit score. Even if your debt is relatively small, it’s crucial for you to make your payments on time. Monthly utilities also count, so make sure your electric and water bills are submitted on time.

Pay off your debt instead of moving it around

Keep paying your debt off. It can be hard to pay down your debt while you keep ringing up new balances. It may be time to put your credit card on ice for a little bit while you focus on paying down your existing debt. When you have debt accumulating in multiple different places, your best bet is just to pay it off. When you move your debt around you may have transfer fees and worst can happen- you don’t tackle your debt the way you intend, and you end up digging an even deeper hole of debt.

Apply for new accounts only as needed

Applications for credit show up as inquiries on your credit report, indicating to lenders that you may be taking on new debt and lowering your score. It may be advantageous to only use the credit you have in order to prove that you are able to manage your current credit responsibly.

Use credit cards periodically

You have to use credit to build credit, so using a credit card responsibly can result in a better credit score than if you never use one. In addition to building credit, credit cards offer multiple benefits like sign-up bonuses, cash back, investment rewards, frequent flyer miles, zero international fees, extended warranties, and grace periods for your purchases. Debit card and cash purchases don’t show up anywhere on your credit report, which means they don’t build any credit.

Avoid delinquencies

Delinquencies can remain on your report for up to seven years, and some bankruptcies may remain on there for up to 10 years! These will continue to affect your credit score until they reach a certain age. Better to be more responsible now so it doesn’t end up hurting you in the long term.

We offer our members a free credit review annually, if you’d like to schedule an appointment and get personalized suggestions to increase your score, give us a call today at 832-604-4848.