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If you want to improve your credit score, don’t be overwhelmed or discouraged. It’s possible to improve your credit score, and the first step is educating yourself. A personal credit score simulator, like the one provided by the TGS Financial System, is a way to stay encouraged. As you see your credit score improve on the app, it’s rewarding to know your efforts are paying off.

Here are some quick tips to get you started on improving your credit score:

Review Your Full Report and Monitor It with a Personal Credit Score Simulator

Knowledge is power in the case of credit scores. Pull your full credit report from the three major credit reporting bureaus. Those companies are Equifax, Experian, and TransUnion.

You are legally entitled to one free report from these agencies every year. If you want to save time, a Google search provides websites that pull all three reports at once; just be sure to take advantage of your annual free report from the agencies.

You are also entitled to a free credit report if you’re denied credit based on information from it. A letter is typically sent indicating this from the company that denied you credit. It’s another opportunity to check on your report.

Checking on your credit report periodically is a way to monitor unusual activity that indicates identity theft. This should be reported immediately if spotted.

Review each credit report and note any discrepancies. If there is inaccurate information, notify the credit reporting agency in writing. Be sure to include any supporting documentation. The credit agencies are required to investigate a report that is not considered frivolous. They normally do so within 30 days.

The credit agency then notifies the organization that reported the item in dispute. If the organization finds the item is inaccurate, they are required to notify all three credit reporting agencies for a correction.

Since your creditworthiness is judged on these reports, it’s important that they are accurate. While organizations don’t have ill intentions and credit reporting is subject to laws and regulations, mistakes do occur. You are the watchdog of your report, so it pays to be diligent in checking for and reporting errors.

Using a personal credit score simulator is another good way to stay on top of your credit profile. TGS is a tool that includes a personal credit score simulator as a benefit. And TGS sends notifications regarding information that affects your credit profile. When you identify improving your credit score as a goal, tools like these make it easier to achieve.

Pay Bills on Time to Improve Your Credit Score

It’s common knowledge that paying bills on time helps your credit. However, to stress this factor’s importance, consider that one late payment stays on your credit report for up to seven years. Payment history is weighted at 35% of your overall credit score and is the most significant single factor.

This is why it is important to not take on more in monthly payments than you can handle. In addition, maintaining a savings reserve to meet monthly payments for a period of time in case of a job loss or illness is wise.

If you miss a payment due to an unforeseen circumstance or oversight, and especially if your credit history is established positively, contact the credit card company. Explain the situation and see if avoiding a late payment report to the credit bureaus is possible.

Also, don’t forget or overlook student loan payments. Late student loan payments are reported to credit agencies and negatively impact your credit score.

If you come to difficult times financially, consider seeking a student loan deferment. While it’s not ideal or a long-term solution, deferments stop late payment reporting.

If you are someone who forgets monthly payments, there are tools to help. Using the TGS Financial System is one way to keep up with your monthly credit card payments. Another suggestion is to set automatic recurring payments from your bank account.

Pay Off Credit Card Balances and Keep Them Low

Hand with credit cards suggesting a personal credit score simulator helps manage them.

The other significant factor in determining your credit rating is your debt to credit ratio or credit utilization score. For example, if a credit card has a limit of $3000 and you consistently maintain a balance of $2900, that has a negative impact on your debt to credit ratio.

Use the TGS app to monitor your credit spending and limits to maintain a good credit utilization score. Keeping balances low on credit cards requires discipline, but is well worth it when it comes to credit ratings.

Also, paying off credit card balances in full impacts your credit score positively.

Diversify Credit to Improve Your Score

The types of credit accounts on your report are a factor in determining your credit score. Credit scores improve when your credit accounts are diverse. This is easier to achieve once you purchase a home and the mortgage is on your report. But until then, installment loans for large purchases like automobiles help show credit diversity.

Another example of credit diversity is student loans. Take advantage of the opportunity to build credit by paying your student loan on time.

Add Accounts with Positive History to Your Credit Report

Take advantage of paying your utility and cell phone bills on time by seeking to add that history to your credit report. It doesn’t hurt to ask your cell phone provider or utility company if there is a way they can report your payments to credit agencies.

Experian now offers an optional service that adds utility, cell phone, and even Netflix payments to your credit report.

Consider Tools Like TGS Financial System to Help Improve Your Credit

The Good Steward Financial System (or TGS) was designed to help people like you. TGS is an easy-to-use app with features like the personal credit score simulator previously mentioned. Knowing your credit score and staying on top of it is a way to improve it. TGS gives you the ability to do that in the palm of your hand.

TGS streamlines the management of your credit cards. It tracks your spending and credit card usage. Easy access to this information assists you in ensuring your credit card balances do not negatively impact your score.

Improving your credit is an attainable goal supported by the TGS Financial System. TGS is available for download on Apple’s App Store and on GooglePlay. For more information on TGS and its features, click here.

Your first experience with the world of credit building often begins with a credit card. It is exciting to receive a shiny new credit card for the first time. Credit cards do help you build good credit if properly managed. The Good Steward Financial System helps to establish practices and strategies with credit cards early on that can help you achieve future goals.

The Amount of Credit You Are Utilizing Affects Your Credit Score

Your credit score is affected by your debt utilization percentage. Debt utilization is how high of a balance you carry compared to the credit limit on an account. For example, if you have a credit card with a credit limit of $2000 and you charge $1800 per month, you are utilizing 90% of your available credit. A high debt utilization score has a negative impact on your credit rating.

If you want to improve your credit score, the recommendation is to use no more than 10-30% of your available credit every month.

Some people consider spreading purchasing out over several credit cards to help manage their debt utilization percentage. This approach has more drawbacks than benefits. First, there is the extra time involved in managing multiple monthly credit card payments. Even letting one monthly payment on a credit card slip has a negative impact on your credit score.

Your debt utilization score is weighted at 30% of your total credit score, and the only factor that carries more weight is the timeliness of your payments. Payment timeliness is weighted as 35% of your total credit score.

So if you want to raise your score, keeping your debt utilization low and paying bills is the best strategy. Why risk juggling four to five monthly credit card payments when you could accomplish a better result with one to three?

A potential lender may view too many credit cards on your report as a red flag, even if you are making payments on time.

How Many Credit Cards Should You Have?

How many credit cards you should have is a difficult question to answer, because there is no magic number. It is true that credit scores can increase slightly when you are approved for more than one credit card. A lot of people find success with having one credit card for daily purchasing that they pay off in full every month, and one or two reserved for emergencies or larger purchases. By not carrying the emergency cards on a daily basis, they are less likely to run up those balances on impulse purchases.

Before opening multiple credit card accounts, it is important to remember that your credit score can take a hit if numerous companies are pulling your credit report in a short period of time.

Your credit score is also affected by the average length of time you’ve had accounts open. When you open a new credit card account, you risk lowering that average.

As you build your credit score, the number of offers for cards you receive in the mail will increase as well. Credit card companies make it tempting but it’s best to proceed with caution. Jumping from one credit offer to another based on the rewards program offered, for example, is not going to advance you towards your long-term credit goals.

How to Raise Your Credit Score Without Spending Money

It can be frustrating when you realize it takes credit to have good credit. There are some ways you can raise your credit score without making purchases on credit cards and paying the balances on time.

One way to raise your credit score without spending money is to see if someone with good credit can add you as an authorized signer on a card in their name. If that card is paid on time, it will have a positive reflection on your credit score.

If you qualify for a credit card on your own, you can build your credit by charging a small amount and paying it off every month. Consider charging small monthly subscriptions like Netflix or your preferred music service to one card and establishing a history cycle of paying those balances in full every month.

Another good way to build credit is to obtain a secured credit card. Secured credit cards require you to provide money upfront for the amount of credit you have on the card. The amount you put down is your credit limit and caps your spending. Secured credit card companies do report to the credit agencies. You can build your credit by paying off any purchases you make on a secured credit card monthly.

Even if you don’t have credit cards, you may be paying bills on time that don’t report to credit agencies. Landlords and utility companies don’t typically report to credit agencies, but you can certainly ask them to. If they agree, you can build some credit this way and receive the reward for what you were already doing.

General Suggestions For Building Credit

First and foremost, if you want good credit pay your bills on time. If you struggle with this, consider setting up automatic payments from your bank and using The Good Steward Financial System to manage your credit cards.

Another suggestion is to not close credit card accounts even if you no longer use a particular card. As mentioned, your credit card score is affected by building history, and if an account is in good standing the longer it is open will benefit your credit rating.

Most people start building credit with credit cards, but one factor in improving your credit score is diversification in the types of credit you have on your report. Having a car loan or mortgage builds credit, but if those options are out of reach for the time being, you can take out a small personal loan for a purchase like a computer or piece of furniture. These are considered credit builder loans and will do just that as long as you pay the monthly bill on time.

Credit cards can be beneficial in building good credit, but it pays to keep the big picture in mind and incorporate them into an overall strategy for building good credit. Contact us for more information on how The Good Steward Financial System can help you with your credit goals.