Chicago, IL – May 27, 2014 – It is vital to maintain a good credit score in order to qualify for a credit card, finance a new car, buy a house and in some cases to obtain a job. The Better Business Bureau (BBB) advises consumers to follow simple tips to maintain or improve their credit score and to avoid common mistakes.
“Keeping your financial house in order does take some work but it not difficult to do,” says Steve J. Bernas, president & CEO of Better Business Bureau serving Chicago and Northern Illinois. “Once your credit is tarnished, it can be difficult to improve your overall score.”
The BBB offers the following tips:
- Establish credit. A good credit history is essential. If you don’t have any credit cards, you might consider opening an account, using it sparingly and paying it off at the end of the month. Someone with no credit cards tends to be regarded as higher risk than someone who has managed credit cards responsibly.
- Visit AnnualCreditReport.com. Consumers are entitled to one free report from each of the three companies, from the government-sanctioned website annualcreditreport.com. It is vital to check these reports for inaccuracies and dispute any errors. Checking your credit reports does not affect your score.
- Pay off debt rather than move it around. Debt is debt, and shuffling it around from one line of credit to a new one can be a problem. Opening an additional credit line to do this can weigh down a credit score.
- Pay off highest balances first. Though you may be tempted to pay off smaller balances first, paying down a large balance on a particular line of credit may raise your score, because it represents the freeing-up of a larger portion of your available credit.
- Don’t hide. If you are over your head in debt, contact your creditors. If you can start managing your credit and paying on time, your score should increase over time. Seeking assistance from a credit counseling service will not hurt your FICO score.
- Set up bill pay reminders. Being late or missing payments tells lenders that you are not responsible with money. Consumers can set up a reminder of upcoming payments or automated payment through a financial institution for utilities, credit cards and other payments.
For more tips, visit www.bbb.org, like us on Facebook or follow us on Twitter.
The BBB is a non-profit, non-governmental organization. It is supported by businesses to protect consumers against scams and other unethical business practices. The group accomplishes this by educating both consumers and businesses, and by highlighting trustworthy businesses. By developing reports and ratings on businesses and charitable organizations, the BBB encourages people to use these as resources and referrals to utilize the free services before making a purchase or donation. The BBB helps resolve buyer/seller complaints through its alternative dispute resolution process. In 2013, the BBB provided more than 22,600,000 instances of service. Over 80 percent of consumer complaints to the BBB were resolved. The Better Business Bureau serving Chicago and Northern Illinois is a member of the international BBB system that services the United States, Canada and Mexico.