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Building Your Credit Score

April 27, 2016 by Justin Weinger

If you are thinking of making a large purchase down the road such as a home or vehicle, you cannot do any of these without someone reviewing your credit score.  To ensure loan approval, not to mention that you are not paying outrageous amounts of interest with little going back to principal balance, you need to at least have above-average credit scores.  Credit score ranges from 350 to 850 and is based on information on from your credit report such as credit history and payment amounts.  The higher the score, the more favorable you are to a lender, and that goes along with having the least amounts of interest to pay back.  A “good” credit score can range from 720 to 750, 750 to 800 is “very good”, and 800 and over is the top tier and should never have any issue getting approval.  Now what if I do not have any credit and want to build it up?

Well first how do I know my credit score?  Well you are entitled to a free copy of your credit report once a year from the three major credit bureaus:  Experian, Equifax, and TransUnion, directly, or from trusted sites such as Credit Check Total. The only problem with using this free service is that your credit score is not included, so you will have to pay for that.  The report from each credit bureau could look a little different depending on the information it reads, so it is important to double check for accuracy.

Now what can I do to build credit?  Opening a charge card, using it every month, and then paying the entire statement balance off each month can be a great way to start.  It shows the creditor that you are responsible enough charging your account up, but making sure that it is all paid back.  You may not start out with a high limit, so don’t worry if you are approaching the limit, but make sure it is paid off when the time comes.  Lenders will start to raise your credit limit, and continued increases with responsible payment history and your score will rise.  Opening up additional credit such as auto and home are important, but with every credit account you have, payment history is important, so make sure all payments are made on time, even if you fall short one month and can only make the minimum payment.

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