Improving Your Personal Credit

Your personal credit score is more important than you think. Your three-digit personal score gives you the ability to get approved for a mortgage, car loan, or any other high priced purchase. If you’re just getting started with your business, you may want to get a personal loan to get your company up and running. In that case, you’ll need at least a score of 640 to get a loan with a reasonable interest rate.

If your personal score is low, here are a few things you can do to start raising your credit score:

1. Check Your Credit Report
You need to know what your score is and what your credit report includes so that you know where you stand. Each year you can get a free credit report from the three major credit reporting agencies (Experian, Equifax and TransUnion) by visiting www.AnnualCreditReport.com.

After you have your report, check to make sure that the balances listed match your current account statements and check for any errors or accounts that you don’t recognize. If anything is incorrect on your report, contact the reporting agency right away to get it corrected.

2. Don’t Close Old Accounts
For credit cards you don’t use, keep them open but cut up the card and throw it away. The average age of each credit account makes up part of your score. You may think getting rid of accounts you’ve paid off years ago will help your credit score, but it will actually do the opposite.

A portion of your credit history is determined by the average age of your accounts, which means older accounts boost your credit score. The fact that you were able to pay off your old accounts reliably and that you’ve held those accounts for years are marks in your favor.

3. Use Less Than 30% of Your Total Available Credit
Do you currently carry a credit card balance? Even if you’re making on-time minimum payments, you should stop digging yourself further into debt. A portion of your credit score is determined by your “utilization ratio” – the ratio of the amount you owe, relative to your total borrowing capacity. Your ideal utilization rate should be 30% or lower.

Any measures you’re taking to build your credit score will only be undermined if you keep racking up higher balances. Do whatever it takes to stop spending money and adding extra charges to your account balances.

4. Have As Few Hard Inquiries As Possible
If you have a lot of hard inquiries on your personal credit report, it could make your credit score lower. A hard inquiry happens when a lender checks your credit to make a lending decision. The most common hard inquiries are for loans, credit cards, and mortgages.

Soft inquiries do not affect your credit score. Soft inquiries are made when someone checks your credit score just to see how responsible you are with your credit. Examples of soft inquiries include when you are preapproved for a credit card, or if an employer checks your credit report. If you rent a car, get satellite TV, buy high-speed internet, or open a checking/savings account, those are also soft inquiries and do not affect your credit score.

If you need assistance with building your personal credit score, contact a Nevada Corporate Headquarters Representative at 1-800-508-1729, Monday thru Friday, 8 am – 5 pm PST.

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