In today’s day and age, a credit score is more important than ever. Not only does a good credit score mean better interest rates on loans and credit cards, but it can affect you when looking for a place to live, applying for insurance, and even when finding a job. Whether you have a great credit score, one that needs improvement, or no credit score at all, sometimes dealing with your credit history can seem like an impossible, never-ending hill to climb.
The good news? No matter where you stand with your credit, there’s never a bad time to start climbing that hill. There are plenty of ways to get started right now, without even getting up from your computer! So, if you’re ready to take a break or procrastinate while still feeling productive, the experts at First Northern have a couple of ways to get started.
Check Your Credit Report & Score
While some say that ignorance is bliss, they probably weren’t talking about finances. Keeping up to date on your credit score and report is one of the best ways to improve and maintain it. Don’t wait until you think there might be a problem to check up on your credit history. Checking your credit report even when you don’t think you “need” to means you can catch false reports and identify problems earlier.
You can obtain your credit report from each of the three bureaus — Equifax, TransUnion, and Experian — once every 12 months. To see your report, there is a central location at which you can request all three. You can get your report by visiting their website or contacting them directly:
Mail: Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281
Because each bureau allows you to check your credit report once every 12 months, it’s a good idea to stagger checking them so you can obtain it multiple times a year.
As of right now, due to COVID-19 conditions, you can also get your credit report for free each week until April 2022, so now’s a great time to check your report!
That being said, while the three bureaus provide the credit report, they will not provide your credit score. Your credit report will provide you with all the applicable information related to your credit history, but your credit score is what lenders tend to use to interest rates and terms. You can acquire your credit score directly from the three bureaus for a fee.
There are also other ways to view your score — or an approximation of it — but use caution when seeking these out. Do your research before using any third-party sources, and always be wary of those asking for personal information or payment to view or “fix” your credit score. When it comes to credit and identity theft, where there is an opportunity to help, there’s an opportunity for fraud as well.
Pay Down Debt
One way you can start tackling your credit score right now is to pay down some of your debt. It may seem obvious, but let’s be honest, taking your hard-earned cash and putting it towards debt isn’t exactly fun. But paying down more of your debt isn’t just good for your credit score. A lower balance means less interest to pay — which means you can use the extra cash for fun things in the future.
To really make the most of your payments and eliminate debt efficiently, you should determine which of your debt should be paid down first. Your highest priority debt should be easy to single out.
First and foremost, if you have any bills or loans with past-due payments, these should be attended to first.
If you don’t have any outstanding bills, then these are some good examples of high-priority, high-interest debt that you should attempt to pay down first:
- Credit cards
- High-interest loans
- Medical debt
- Student loans
Remember, unless it’s absolutely necessary, you should never let a bill go past due to pay another. Not only will a past due payment result in extra fees and interest, but it will negatively impact your credit score. It’s a good idea to set up automatic payments for the minimum required amount each month, then adjust to pay more if you are able.
If you find yourself caught up on your bills with enough money to keep automatic payments on for at least the monthly payment each month, challenge yourself to do more! While the minimum monthly payment is all that’s required of you, you should try to pay more if possible. If at any time you find yourself with a windfall of cash, such as a tax return or a bonus, you should consider dedicating at least some of it to paying down debt.
Talk to Lenders
Having trouble with creditors? Student loan payments too much of a burden? Bills too high? You have options! Student loans have repayment plans that work with your budget based on how long it will take to pay back. You are also able to defer payment in times of financial hardship. Check out Balance’s guide to paying off your student loans to find the right plan for you.
Creditors and utility companies will often work with you as well. If you find yourself behind on credit card payments, try giving them a call! Creditors can help you come up with a plan to begin repayment. They may be also willing renegotiate terms with you if you agree to make a partial payment — even if you’re behind on payments. Balance recommends the following when dealing with your credit card and loan companies:
- Don’t Wait. Deal with the problem now, rather than ignoring it.
- Be Honest. Avoid excuses and stories and explain the situation truthfully.
- Stay Calm. Getting overly emotional can make you say something you might regret.
- Be Conservative. Don’t promise to pay more than you reasonably can.
Just like you can call your creditors to work with you to make payments, so can you negotiate with a wide range of other fixed and variable expenses. For example, if you find your internet or phone bill is too high for you to manage, often times speaking with a customer service representative can result in finding discounts or reduced rates. Don’t be afraid to be persistent! If they think they might lose your business to another provider, they’ll likely be motivated to find you a rate that makes you stay.
When was the last time you shopped around for insurance rates? You may feel that it’s not worth the hassle but switching providers could save you hundreds — if not thousands — per year. If you need a break, why not scroll through rates for rental, homeowners, or auto insurance. It’s a great way to break up the monotony of your day and you’d be surprised at the savings you can find.
Even your credit card might need a refresh! Oftentimes, cardholders will take on a card for the introductory rate and hold onto it for years, which is not a bad idea when it comes to maintaining a healthy credit history length on your report. However, just because you keep your credit card open, doesn’t mean you need to pay off the balance at its inflated rate.
If you have a balance you’re struggled to pay off because of a high rate, consider a credit card balance transfer. Cards like the Visa Credit Cards at First Northern offer the perfect alternative to your high-interest card, offering low rates and a balance transfer with ease. You can transfer the balance and keep your old card open, thereby lowering the interest and making paying debt down easier without impacting your credit score by closing your existing card.
And while you’re finding a lower rate for your credit card, why not consider doing the same for your existing home and auto loans. Rates change, and often refinancing your mortgage or auto loan at the right time can save you thousands over the term of your loan. Check out First Northern’s DrivingSense program as an alternative to your auto loan for lower rate and lower monthly payment.
Seek Out Help
If you find yourself overwhelmed by bills, loans, credit cards, or your budget, it can never hurt to reach out for help. First Northern and BALANCE together have a wide range of resources to educate and assist with getting you to the peak of financial health.
There are a ton of products and services available to you, many of which you can access right from home — and many that are free as a First Northern member. We provide our members debt and budget coaching, credit report reviews, budget planning, free seminars and webinars, and much more. Our experts across all our branches are also happy to answer any questions you might have about programs, products, and services that can improve your financial wellness.
Need extra help improving or building your credit score? Check out First Northern’s CreditSense program. This money management program offers special loans, accounts, and financial assistance for those members who need a helping hand.
The credit bureaus also offer assistance to account holders, and you should contact them directly if you find inaccuracies or anything suspicious on your report. However, be wary of debt consolidators, repair services, and any other company that stands to profit from your misfortune — or worse. If anyone suspicious asks for personal information or payment to fix your credit score, remove delinquent accounts, or help pay off your debt, it’s probably best to disregard them entirely.
Time to Get Started!
It’s no secret that most people find repairing and improving their credit history to be something of a hurdle. Unfortunately, for many, there’s a lot of misinformation and mystery surrounding credit, and sometimes it can be overwhelming when you decide to inform yourself. The good news is that it’s never a bad time to start improving your financial wellness, and that there are a lot of reputable resources out there to make you an expert.
If you find yourself wanting to procrastinate while still feeling productive, why not use the resources and tips above to start yourself on the journey to great credit? Even dedicating fifteen minutes to your credit history can get you closer to your ideal score and make climbing that hill less like extreme mountain climbing and more like a leisurely stroll.
Want to get started now, but need a little advice? First Northern’s financial experts are happy to help lead the way! Contact us and we’ll work with you to help you make a plan — all from the comfort of your home.
By Maria Carvell, Marketing Relations Supervisor