How To Build And Boost Your Credit Score
While many countries do not have a credit scoring system, in the United States credit is king. Taking care of your credit allows access to loans for big-ticket items such as homes and vehicles. Credit checks are also often required to rent apartments.
You may have a down payment for a home, but without good credit, it will be difficult to find a lender to help finance your purchase or an apartment development willing to grant a lease.
According to a 2023 FICO report, the average credit score in the U.S. stands at 717. While this may seem respectable given the maximum score is 850, many Americans are slipping into financial habits that could jeopardize their long-term financial health.
Christian Widhalm, CEO at Bloom Credit, recently spoke with The Street about how to help manage your credit.
Making late payments is one of the biggest mistakes people make when it comes to credit. And, missed and late payments are rising due to inflation. In fact, “18% of the population have had a 30-day or worse past-due payment on one or more credit accounts” in 2023, according to FICO. As inflation goes down, prioritizing timely bill payment will greatly assist your score.
“One of the biggest things for a credit score is a positive repayment history,” he continued. “You have to start demonstrating how you are becoming more positive regarding your repayment history, which will take time.”
Repairing credit due to lengthy mismanagement of funds takes patience and consistency. However, Widhalm believes establishing credit can be a much easier process. Having possession of a checking account is the key.
“You can actually report 24 months of your checking account history almost overnight,” he explained. “Because you can establish tradelines on past payments that ultimately can help impact your credit score much more quickly.”
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