Building Your Credit: 101

Building your credit: 101

If you’re new to the lending world or just need a few tips to get that credit score in shape, you’ve come to the right place. In this post, here’s what you can expect to learn:

  • How your credit score is calculated

  • How to build a credit score from scratch

  • How to improve your current credit score

Let’s start this off with a quick number to get the ball rolling, 3-6 months. That’s the amount of time it could take of good credit behavior to see a noticeable change in your credit score, according to @Debt.com. So that means, that once we establish this credit, we should aim to spend quite some time maintaining that score.

How your credit score is calculated

Your overall credit picture includes your credit report and your credit score. Your credit score takes the info in your credit report and creates a number that represents many things such as your payment history, length and type of credit, outstanding balances, length of credit history, number of credit inquiries, and types of credit history (student loans, credit cards, etc.).

Lenders also pay attention to how much credit you use, how much credit you have available and how many times other lenders and creditors have pulled your credit information.

How to build your credit score

So, let’s say you’re starting from scratch and you want to know how to build good credit. You can start by getting a credit card. They are one of the best tools for building credit, but make sure you’re smart about spending. This doesn’t mean to start spending above your means, but little things here and there like groceries or a new outfit will help. Then once the time comes to make those payments, you can either automate them or set a reminder so you remember to pay that balance down. We look to make sure you’re making those payments and making them on time.

How to improve your current credit score

Now, let’s say you just pulled your credit score and you’re not happy with the number. There are a few ways we can get that number up with a little dedication and time. We can focus on making a list of debts you have, strategize on a monthly plan to get that number down and make sure we’re paying down that bill every month. If you have questions on how to come up with a payment strategy or just general credit questions – we’re here to help you.

At Atlantic Bay, we appreciate that you want to educate yourself on your credit score and you should! It’s a number that might seem scary, but if you break it down and build it up over time, it will set you up for success when it comes time to buying a home! If you have any credit score questions or you’re ready to take the next step to homeownership, let’s hop on a call today!

(1) This information is for educational purposes only and should not be relied upon by you. (2) Credit score improvement is not guaranteed. (3) This information is not intended to replace the advice of a legal or financial professional.