As high as 90% of all lending decisions in the United States are based on your FICO credit score. This means that if you are looking to get a loan, lease or line of credit to buy a car, vehicle, house or pay for your college, personal expenses and business expenses, you must be prepared to share your credit score with your lender. With credit playing such a huge role in the big decisions in the lives of most people, it is very important that you maintain good or excellent credit.
When you are serving in the military especially if you are stationed overseas, your credit score may not be a high priority for you. However, it does impact important financial decisions you will make. Hence making it a priority and staying on top of it is essential.
If you have had bad credit or your score has fallen, don't despair. It is not the end of the world. You may not be able to get that loan, lease or new credit card that you want right away. You will have to work for it.
Thankfully you can repair your credit score and put yourself in a more favorable light to lenders for any credit scenario through discipline and effort. Repairing credit and improving your FICO score does not happen overnight. There isn’t a quick easy fix. Improving your credit and FICO score will take time just like it takes time to lose weight.
The most important decision you can make to improve your credit score is to manage your credit responsibly over time. The first thing you should do is to check your credit score. You can do this for no cost and without dinging your credit through CreditKarma.com. We highly recommend it!
Check Your Current Credit Report - www.CreditKarma.com
After you have requested your credit report, take a close look at it. Check to see that the information is correct, from the payments listed to your accounts, their status (open or closed) and your personal information. If you have any errors, fill out a dispute with them online. Each of the credit bureaus may take some time to review dispute information submitted online, but you will see incorrect information fixed through your diligence. Be sure to follow up if changes are not made within a 30 to 45 day window.
Set Up Payment Reminders and Pay Bills on Time
This step can be very helpful because it prevents you from making mistakes. With payment reminders you can make your credit payments on time, which is by far the most important factor in your credit score, accounting for up to 35% of the score’s makeup. You can also consider doing automatic payments to ensure your payments are done on time. You will however still want to make additional payments beyond just the minimal amount in order to genuinely pay off any debt you have. While you may have paid bills late previously, be sure to pay your bills on time. It will show in your account over time - 3 months, 6 months, 1 year and more. This positively impacts your credit report and score.
Lower The Amount of Debt You Owe
Its called credit card utilization. Basically, your score is impacted by the amount of available credit you have. To boost your score, try to keep your balances under 30% of your total credit line. This takes time and diligence but is very satisfying too and can have a dramatic impact upon your credit score. Start by no longer using your credit cards and then paying them off with a payment plan that targets the cards with the biggest balances and higher interest rates while still meeting minimum payments on other accounts.