5 Tips for Improving Your Credit


No credit or a bad credit score can be an obstacle to home buying, but here is some valuable advice to help you improve your finances. 

Al Goldstein, CEO of Pangea Properties in Chicago, has these five tips which will help you take control of your credit.
1. Get a credit card…really!  A credit card is a credit-building tool when used correctly. Goldstein suggests charging a few affordable purchases each month, and then pay the bill in full (before the due date), which will build up credit.  However, it is important to not miss or make any late payments to avoid the interest backlash.
2. Keep an eye on credit card balances.  On the other side of the coin, it is important to only use credit cards for purchases that could easily be paid out of pocket.  Racking up big balances can hurt your score, regardless if the balance is paid in full.  You should stick to 10 percent of the credit limit.
3. Review credit report and fix errors. You are entitled to a free credit report each year, and you should get into an annual habit of requesting and reviewing the report. If you spot incorrect credit limits, closed accounts, or other errors on the credit report, you should dispute them right away. 
4. Leave paid debts on credit report.  Not all old debts are bad, says Goldstein. Documentation of past debts, such as a car loan, provide a track record of how you have handled and paid debts, which can be good for your credit. The longer the history of good debt, the better it is for the score.
5. It doesn’t hurt to ask.  If you have debt and are looking to pay it off quickly, simply asking the lender if they will lower the interest rate may work in your favor.  If there are one or two late payments on your statements, ask for a goodwill deletion, which can pay off in the long run.

Source: Pangea Properties, www.pangeare.com

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