How to Build and Maintain a Good Credit Score

Credit scores are numerical representations of your creditworthiness. They range from 300 to 850, with higher scores indicating better credit health. Lenders use these scores to assess the risk of lending money or providing credit services to you. A good score can lead to better loan rates, easier approval for rental applications, and even lower insurance premiums.

Steps to Improve a Poor Credit Score

1. Check Your Credit Report: Regularly review your credit report for errors. You can request a free report annually from each of the three major credit bureaus.
2. Pay Bills on Time: Late payments negatively affect your score. Set up reminders or automate payments to ensure timely payments.
3. Reduce Debt: High balances on credit cards can lower your score. Pay down debt strategically, focusing on high-interest accounts first.
4. Limit New Credit Applications: Each application can slightly lower your score. Apply for new credit only when necessary.
5. Keep Old Accounts Open: The length of your credit history impacts your score. Keeping older accounts open can improve your score over time.

Common Myths About Credit

• Myth: Checking your own credit report will lower your score. Fact: Personal inquiries do not affect your score.
• Myth: Closing old accounts will boost your score. Fact: Closing accounts can actually decrease your score by reducing your available credit and shortening your credit history.
• Myth: Carrying a balance improves your score. Fact: Paying off your balance each month is better for your score.

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