The Dos and Don'ts of Improving Your Credit Score

posted 1/31/2015 in General

You have big plans. Maybe it’s buying a car, renovating your home or purchasing a new home, all of these things likely take financing. But when you go to apply for your loan, your interest rate is a lot higher than expected or you are unexpectedly turned down for the loan. What gives?

The typical cause is a bad credit score. This can be the result of missing payments on other loans or credit cards, having too much debt or a numerous other causes. Without the loan, you can’t go through with your big plans.

Lincoln Savings Bank is here to help. There are many “dos and don’ts” of managing your credit score. You may be following some, but be out of line on others. Take a look at the list to see where you’re doing well, as well as where you’re falling flat.

You Should Definitely Do This

  • Order a copy of your credit report annually- you get one free look at your credit score from each of the three major credit bureaus. Visit to get your free score. You can also order your score from each bureau for a small fee.

  • Know the power of your credit history- your credit history tells a lender how big of a risk you are for repaying the money they lend you. Too many bad marks and your risk goes up, meaning higher interest rates or credit denials.

  • Read the fine print on credit card applications- you’d be shocked about some of the things hidden in the small print on credit card applications. Be sure to read over and write down your interest rate, grace periods, credit limits, annual fees and other vital information.

  • Pay the minimum monthly amount- even if it’s all you can afford, it’s better than having to pay a late fee PLUS the interest you would have paid anyway.

  • Be cautious when someone says they can “fix” your credit score- honestly, the only one who can fix your credit score is you. Anyone saying otherwise has a different agenda.

You Definitely Shouldn’t Do This

  • Miss a single payment- this is one of the most common issues with debt. A missed payment can negatively affect your credit score for months, so stay on top of payments.

  • Overspend- using too much credit is a red flag for lenders. It signifies that you rely too much on credit. Try to keep your usage below 30 percent of your limit on any credit card.

  • Ignore red flags of credit issues- consistently paying late, missing payments, paying only the minimum or using cash advances to cover loan or credit card payments are all HUGE red flags that you need help.

  • Share your credit card number, ever- this may seem obvious, but we wouldn’t say it if it wasn’t necessary. Once you give out your number, you are giving someone access to your credit line, your credit score and your life.

Fixing a bad credit score doesn’t have to be hard, but it does take time. You may have to delay some grand plans until your score is fixed, but it is worth it to get approved or get a better rate. Put these tips from Lincoln Savings Bank to use today if you want to improve your credit score, and get yourself on track for a better 2015.

Lincoln Savings Bank, Member FDIC, Equal Housing Lender

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