Aim High to get Low!

It’s a strange concept, aim higher to get lower? I am referring to your Credit Score. Do you know what your number is? Since your Credit Score can never be too high, I think that all of us can work on improving in this area. Credit is something that is very important to me, not only as the CEO of a financial institution, but also as an individual. I have worked very hard to ensure that I have a good score but I know I can always try to improve it. And, so can you with these easy tips:

1. If you don’t know your current score, get it. Equifax, TransUnion and Experian all offer different versions of this number. However, it is the FICO formula developed by banking consultants at the Fair Isaac Corporation that is the most accurate. You can obtain this number by visiting myFico (there is a cost). Or, if you are a WOW! Checking member, we send you your score automatically every quarter.
2. Pay off as much as you can on your credit cards. Lenders like to see that you are able to spend within your means. If your cards are all maxed out, it may indicate that you are at risk for financial problems. Even with a good score, carrying high balances on your card can have an impact. By paying off a balance of $2,250 on a card that has a limit of $2,500, you can boost your score up to 75 points!
3. Make your payments on time. One late payment can lower your score by up to 100 points! Even if you can only afford to make the minimum payment, make sure it is paid on time.
4. Add your spouse to your card (or vice versa). If you, or your spouse, have a card with a long history of good payments, ask the card holder to issue an additional card. Although your spouse won’t be liable for the debt on the card, they will benefit from your positive history and a boost in their available credit.
5. Keep applications for credit to a minimum. Although applying for credit won’t necessarily hurt your score, if you have multiple applications within 24-months a lender may become suspicious of your reason for wanting a loan. This may indicate to a lender that you are trying to take on too much debt at once.
6. Check your history for errors. The contents of your credit report will affect your score, so make sure everything is correct. You are entitled to a free credit report from Equifax, TransUnion and Experian on a yearly basis. If you find incorrect information, it is important to contact each company immediately. Fixing an error on one report will not necessarily be reflected on the others. Visit Annual Credit Report’s Website to download your reports today.
7. Establish some form of credit. There are individuals that prefer to pay for everything in cash. If they can’t pay for it with cash, then they do not purchase an item. Although the principle is good (you should never purchase more then you can pay for) it is still important to have multiple forms of credit. Without establishing a credit history, you may find it difficult when it comes time to purchase a car or a home.

 Establishing GOOD credit is important because it will help you pay less in the future. Individuals with a score of 700 or higher (on a scale of 300 to 850) are considered to have “good” credit. However, to get the best available rate most companies want to see at least a 760. For example, an individual with a $150,000, 30-year mortgage at 5.6% will save $86,000 over the life of the loan versus an individual with a 8.00% rate. So aim high to get low!

 How have you improved your credit score? What tips do you have for individuals trying to pay off high-balance credit cards? Let us know here.