Your credit score–it’s one of the most important ways you have to gain financial power in the world today. Whereas once, everything was paid with cash, today’s world almost requires that you have access to credit in order to gain access to basic services. If you want to rent a car, buy a home with a mortgage, or get a personal loan in a medical emergency, you’re going to need credit to do it.
Pay Your Bills — On Time!
The number one rule of credit is to pay the bill when it’s due. Preferably, you want to pay it shortly before it is due to ensure that you create a good track record. The more responsible you appear, the more likely your creditor is to grant you additional credit down the road–something that can improve your score on its own.
Check for Errors Yearly
Checking your credit history is something that everyone should do–whether you’ve used credit in the past or not. The potential for credit errors can be surprisingly high, and identity fraud can result in longstanding credit issues that may be otherwise unexplained. Even if you’ve never used credit before, it’s best to request a copy of your report from all three major bureaus yearly.
Dispute Issues Promptly
Checking for errors is only the first step. If you find any errors, it’s important that you take action immediately by disputing them with each credit bureau. Common issues include duplications, erroneous entries that really belong to someone else with a similar name, or incorrect debt value entries.
Get a Credit Card
It may seem backward at first. Get a credit card to improve your credit? It’s true–having credit and maintaining it over time is one of the best ways to improve your score. Choosing the right credit card, of course, is also extremely important.
Use Credit Responsibly
Although you should take out at least one credit card, you must use it responsibly if you do. This is also true for any other form of credit you may access from time to time. Don’t forget that some utility bills are also considered a form of credit–cellular accounts are one example of this. As a general rule, always pay off your accounts before or on the due date.