Let’s be honest, we were never fully educated on the best and worst practices when it came to the number we needed on credit scores, making them very tricky. We do, however, know the unsaid: to live within our budget and save for an emergency. However, the credit bureaus skip past this personal finance.
Thus, you should always review and monitor your credit report and score, to keep track. The credit agency might have out of date information of your report and it might even be incorrect. Things like a new job, change of address, or an account you don’t use anymore might not have been noted, therefore, monitoring things like this would be to your advantage.
Paying on time (payment history), is 35% of your credit score!
Late payments are based on three measures: how recent, how severe, and how often your payments are late.
The timeline goes like this: 30 days, 60 days, 90, days, 120 days, 150 days, after this, it is written off as a loss. The importance to keep up with payments is immense. If you can’t keep up, at least stay aware of your lateness, for just one late payment can impact your credit score. On top of that, it can affect future interest rates and late fees.
How to control on time payments?
Make sure to set up automatic payments or reminders on things like your phone. You can use an app for this, or do it through your online banking system, just make sure to always be up to date on when your payments are due.
You should also write down your loan amounts, consumer debt amounts, mortgages, and so on next to your interest rates. Remember to include any balance on your credit card because if you’re not paying your card off fully by the end of each month, it turns into money that you are borrowing.
Try making a budget in order to pay off your bills. To have a good credit score and decrease your debts, maybe try moving these debts to an account with lower a lower interest rate. This way you can pay off debt quicker!
The sooner you take charge of your credit score the better! For any further questions or advice, visit us at Arbetov Insurance, we’re happy to help!