Improving credit Score

As we move forward in our lives, credit score tends to be the last thing on our mind. But it's the building block for everything: our homes, vehicles, loans, everything hinges on credit. So how does one get a good score? We have a few tips and tricks to get you started, or even back on the right track! 

Finding the Right Card
There are hundreds of different cards to choose from, but there are a few key things you should consider. Your options will change as your credit score rises, and those who haven't started building theirs yet may have less options than others.

Generally, you'll want to find a card that has a low Annual Percentage Rate, or APR. Lower rates mean less money is added to the amount you owe for each month you don't pay off the balance. You'll also want a card that has no annual fee, or at least an inexpensive annual fee. And depending on how you plan to use your card, it's a good idea to look at cards that come with rewards or certain benefits. Some earn you miles for travel, others earn cash back on gas or groceries. Though these things have no effect on credit, they can be very helpful in the long run!

Using the Card Effectively
The best way to utilize your card to earn credit is to use it routinely on smaller purchases: gas, a snack from the store, a fast-food meal, something inexpensive you won't have trouble paying off. It's important to pay off the card as soon as possible. This will help grow your credit score and establish credit history as you are using the card but keeping the balance at zero.

If you already have some established credit but struggle to pay it off, the best thing to do is leave the card alone. Focus on paying off what you owe, then let the card go unused when you don't need it. It sounds contradictory, but not using the credit card with a zero balance is also a great way to increase your score! Just having a line open and at a zero balance helps your credit score over time. 

Things to Avoid
Try not to use your card for large expenses unless you know you can pay it off by the deadline. Of course, no one expects an emergency, – just try to pay it off in time! Not making payments on time or using a large portion of your allotted credit will demote your score very quickly. Aim to keep it at a low or zero balance and pay off what you can.

Another thing to avoid is opening multiple cards or lines of credit. Having a few is perfectly fine, but each time you open a new card or line of credit your score will decrease. Even getting a credit report can decrease your score! And of course, having multiple cards and lines of credit can make it more difficult to stay on top of your payments and spending. 

In Summary
The best way to increase your credit is to use a credit card for small expenses, pay it off in a timely manner, and let the card go unused when you don't need it. There are times when large expenses are necessary, but as long as you do your best to pay it off before the due date, your score will get better and better! Be sure to always talk to your financial institution about card options and pick the right one for you!