Wednesday, January 6, 2016

6 Tips To Boost Your Credit Score

Your credit score impacts almost every aspect of your life. Among other things, your credit score will affect:
  • What type of interest rates you can get on loans
  • How expensive your home and auto insurance will be
  • What type of cell phone plan you are eligible for
  • What new credit cards you will able to get

Since it affects so many parts of your life, it's important to protect your credit rating and keep it as high as possible. First Bank of the Lake is here to help you raise your credit score with these simple reminders.

1. Make All Your Payments In Full And On Time
This is the most important thing you can do. In order to keep your credit score high, it is imperative that you make all your monthly payments in full and on time - utilities, mortgage payment, cell phone payment, credit cards, loans, etc. Credit card companies typically include a "minimum payment" amount on your monthly statements, but only making the minimum payment can hurt your credit score. Set up calendar reminders to remind you when to make each payment.

2. Keep Your Revolving Balances Low
Your credit card is an example of a "revolving balance," which is in essence a small loan where the amount is constantly fluctuating. When you make a purchase with your credit card, you are borrowing money from your creditor. When you pay your credit card bill, you are repaying that loan amount. Believe it or not, the amount of outstanding debt you have at any given time can affect your credit score. Credit experts recommend keeping your credit card balance at 30% of your total credit limit. If you find yourself continually bumping up against you credit limit, it may be time to ask for a credit increase.

3. Minimize Your Number Of Credit Balances
The number of credit lines you use on a regular basis may negatively impact your score. One way to increase your credit score is to pay off any outstanding balances on credit cards you use infrequently and instead focus all of your spending on one or two cards. Don't automatically cancel your cards after paying them off, however. Every active card continues to send your information to the credit bureau every month; if you haven't used the card, these reports will reflect responsible spending and no unpaid balances. Keep in mind that creditors may cancel cards that has not been used for a long time, so you may want to make an occasional purchase on your unused cards (and pay it back in full and on time, of course).

4. Pay Off Debt
Don't be fooled: some debt is actually a good thing. By taking out loans and repaying them on time, you show yourself as a responsible borrower and your credit score should reflect your good standing. Debt only becomes a bad thing when you have too much of it and you are unable to pay it off. Once you get one loan paid off, you can begin applying that payment amount to another debt's principal.

5. Space Out Your New Accounts
Every time you open a new line of credit (take out a new loan, open a new credit card, etc), your credit score takes a small hit. If you apply for multiple new accounts in a short amount of time, these small hits can add up. If you are shopping for a new loan, it is important to do so in a timely manner. If multiple creditors pull your report for the same type of loan in a small amount of time (e.g., an auto loan), the credit bureau will realize that you're simply shopping rates and will lessen the negative impact.

6. Monitor Your Score
Finally, don't forget to monitor your score on a regular basis. You are actually entitled to a free copy of your credit report every year from each of the three credit bureaus (Equifax, Experian, and TransUnion). Ordering a report from one of these bureaus every four months can keep you on track of your credit history. Negative marks typically remain on your credit report for seven years (even after the debt has been settled), but you may be able to get it removed. It never hurts to ask!

Credit Questions? First Bank of the Lake Is Here For You!
Your money is your lifeblood, and no one understands that better than our team at First Bank of the Lake. We are honored to be your trusted financial resource at the Lake of the Ozarks. If you have any questions about your credit history or are in need of any banking services in Osage Beach MO, don't hesitate to reach out to our bank at the Lake of the Ozarks. We will be happy to help you in any way we can.

First Bank of the Lake - Striving For Excellence
Member FDIC. Equal Housing Lender.

Located at the entrance to the Osage Beach Premium Outlets!
4558 Osage Beach Parkway
Suite 100
Osage Beach, MO 65065

(573) 348-2265

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