This Is Understanding

Improving Your Credit Score

Your credit rating can be a determining factor in the interest rate you pay on a loan, your ability to secure housing, and more, so it’s important to nurture it. Here’s how:

    • Understand what determines your score. Payment history, or whether or not you pay on time, is 35 percent of your credit score. The amount of debt owed compared to available credit accounts for 30 percent. The length of time you’ve had new credit (and credit at all) is 15 percent of your score. New credit and your percentage of revolving versus installment credit each account for 10 percent of your score.
    • Pay on time. Even if you are making the minimum payments, it’s essential to never miss a payment. Set up recurring payment reminders on an electronic calendar or enroll in auto-pay to ensure you stay current. The longer you pay on time, the more your score rises.
    • Avoid maxing out your credit cards. Keep your credit balances as low as possible and your limits as high as possible. Avoid balances above 75 percent of your available credit.
    • Don’t open too many credit accounts at once. Numerous account openings in a short amount of time can have a negative impact on your credit score.
    • Don’t close all your credit accounts at once. Paying off a credit card and closing an account can feel satisfying—but closing the account lowers your total available credit and can hurt your credit score. Keep some accounts open to protect your credit score.

Are you ready to seriously commit to getting out of debt? Even if your credit is less than perfect, TEG may be able to help you consolidate your high-interest debt into a loan with a fixed rate and term. Call us at (845) 452-7323 to ask about a debt consolidation loan today.

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