Credit Scores.  A simple number we all have attached to our names that can pack a big punch. Your score can take years to build up and just months to destroy.  Do you know yours? If not, you can get your free credit score with this service. The truth is, everyone has suffered from credit blunders, whether you forgot to make a single payment or defaulted on a loan - it happens.  In some cases, a credit score drop can be the result of something you had little control over - divorce, medical bills, and bankruptcy etc.

Understanding Your Score

Maintaining good credit is something we should all strive for.  It is in our benefit to do the best we can in monitoring our score. Most big purchases require decent credit and a low credit score will increase your interest rates, lower credit lines and prevent you from achieving certain goals or milestones.  The best way to rebuild credit is to manage it responsibly over time.

To understand where your credit stands refer to the below breakdown of the different credit tiers:

• Tier 1 (Excellent Credit): 750 and above

• Tier 2 (Good Credit): 690-750

• Tier 3 (Fair Credit): 620-690

• Tier 4 (Poor Credit): 619 and below

Individuals with Tier 1 and 2 credit qualify for the best rates.  Tier 4 is usually the most difficult to get approval for.  Most people can stand to improve their credit score to some extent.  It’s an extremely important part of your life and business.

A Few Things We Can All Implement To Positively Impact Our Score:

Review Your Credit Report

• Begin by checking your credit report.  Request a free copy of your credit report and be sure to look for any errors.  There are 3 major credit reporting bureaus: TransUnion, Equifax, and Experian. Your credit report with all of them will vary a little bit so you want to analyze each. You may notice incorrect late payments reported for an account or the amounts owed for an open account is incorrect.  Spend time and be thorough reviewing the report.  These errors will negatively impact your score so it’s best to dispute them with the credit bureau right away.

Set Payment Alerts

• Key to keeping your credit score in check is making credit payments on time.  Try setting up payment alerts using your phone or opting in for payment reminders through your bank who can send you a reminder via text or email. The other option is enrolling in automatic payments through your credit card/loan providers to ensure never missing a payment.  The downfall of this is that with automatic payments you can only make the minimum payment owed.  To improve your credit and lower debt it’s important to try and make payments higher than the minimum if possible.

Pay Off Debt

• This is much easier said than done but an essential part of improving your credit and overall financial standing.  You want to keep your credit utilization under 30% usage, so monitor your usage accordingly.   After reviewing your credit report, organize your outstanding debt indicating how much you owe and the interest you are being charged for each.  Based on this review, come up with a payment plan that works toward paying the higher interest cards first and maintaining minimum payments on your other accounts.

Improving your credit is important to getting the most out of your money. With patience and discipline, these tips will help you better your score and money management habits.