If you’re not familiar with your credit score, you should be.
If you’re not familiar with your credit score, that’s part of a bigger problem that centers on you not paying close enough attention to your money and how it is being managed.
Your credit score lets lenders know how much of a risk versus reward proposition you are, if you’re going to pay them back based on your history and if loaning you money is ultimately a good idea.
But as much as you believe your credit score is arbitrary and really doesn’t matter as much as say your income or lack of debt, chances are you’re underestimating just how much more paramount those three digits are when it comes to how you’re perceived and just how easily you’ll be able to finance things like a car or home.
What most don’t realize is that raising or “fixing” your credit score isn’t as difficult as you’d think and can be achieved with very little headache on your part, other than just focusing more on your finances overall.
For starters, you should put some sort of plan or schedule in place so that you don’t miss any payments. Missed payments hurt your score tremendously, and yet are the easiest things to fix. Even if you just pay the minimum, that’s better than not paying at all, even if with interest that minimum payment is going to actually be more of a break even as far as the overall balance is concerned.
Planning, too, plays into your success as far as raising that score. Planning can be defined in both paying on time but also getting a better idea of what exactly your debt looks like and focusing on the highest interest rates or using the opposite mentality: start with the small debt first and pay it off so that you can see real progress. No matter which end of the debt spectrum you start from, make sure you pay down credit cards or debt that is near your debt ceiling, meaning if you have a credit card, for example, with a certain maximum amount you can spend and your balance is flirting with that number, you need to focus on that card first.
What you never want to do is look at at a sub 600 credit score and assume all hope is lost. Instead, you should level set and understand wholeheartedly that getting your score out of the doldrums isn’t quite as daunting as originally thought.