Improving your credit score takes time and consistent effort. It’s not an overnight fix, but a steady process of responsible habits, such as making timely payments, managing your debt, and keeping your spending in check. A healthy credit score can open doors for lower interest rates, better loan terms, and greater financial freedom when it comes to major life decisions like buying a home or securing a loan. Here’s a guide to some essential habits that can help you build and maintain a strong credit score.
Pay Your Bills on Time
This may sound simple, but staying on top of your payment schedule is one of the most crucial factors in improving your credit score. Your payment history accounts for about 35% of your score, so even one late payment can have a negative impact. Setting reminders or mobile alerts for payment dates can help, and if you’re a Polam FCU member, the mobile app allows you to pay on the go to avoid late payments.
Pay Down Debt and Avoid Only Making Minimum Payments
Reducing your debt-to-credit ratio (the amount you owe versus your total credit limit) is a great way to boost your score. A low ratio signals to lenders that you manage debt well. Try to pay more than the minimum each month, and when possible, make extra payments — even just one additional payment a year can make a difference, especially for mortgage holders.
Avoid Maxing Out Your Credit Limit
Staying within your credit limit is crucial. Using too much of your available credit can harm your score, so it’s wise to aim for using 30% or less of your credit limit. This keeps your credit available when you need it most and helps you stay within a budget that’s manageable for monthly payments.
Monitor Your Spending Regularly
While it may seem like common sense, many people overlook regular tracking of their spending. Staying aware of your daily expenses and reviewing your statements regularly can prevent overspending. Credit cards make it easy to lose track, so being mindful can help you stick to your budget and keep your credit in check.
Let Polam FCU Help You on Your Financial Journey
At Polam FCU, we’re dedicated to supporting you in making the best financial decisions for your goals and lifestyle. Boosting your credit score is just one part of maintaining financial health, and we’re here to offer guidance every step of the way. Start implementing these habits today for a brighter financial future!