In a previous blog post, we discussed the importance of understanding that your credit score, while significant, is not the sole determinant when it comes to securing loans. Nevertheless, if you’re aiming to enhance your credit score and position yourself favorably for borrowing opportunities, consider following these three key steps:
Timely Payments:
While it may sound like common sense, it’s worth emphasizing that 35% of your credit score hinges on the punctuality of your payments. Furthermore, recent payment history within the last 12 to 24 months holds substantial weight. Therefore, to elevate your credit score, prioritizing on-time payments is imperative.
Minimize Revolving Debt Balances:
Revolving debt includes financial obligations with fluctuating balances, such as credit cards, lines of credit, and home equity loans. These types of debts allow for ongoing balance adjustments through additional charges, making them non-fixed in nature. Approximately 30% of your credit score is contingent on the balances of your revolving debt. To boost your credit score, focus on reducing and maintaining these balances as close to zero as possible.
Address Past-Due Debts:
If you have any outstanding past-due debts, it’s crucial to resolve them promptly. This applies to collections, judgments, or open accounts with recent missed payments. As previously mentioned, a significant portion of your credit score is based on timely payment. However, rectifying debts that were previously overdue cannot be disregarded.
It’s important to note that Stewardship does not offer credit repair services. However, our extensive experience in the realm of financial services equips us with real-world insights to validate the effectiveness of the aforementioned steps. Moreover we do provide valuable guidance through customized debt repayment strategies for our Financial Planning Members. We provide our members with peace of mind about their debt by helping prioritize which debts to pay off first, determining the appropriate allocation of excess income towards debt payments, and creating a detailed plan that outlines when each debt will be fully repaid.
If you are interested in learning more about our Financial Planning Membership check out this page – https://stewardship.pro/financialplan/
