{"id":2168,"date":"2016-12-07T00:15:51","date_gmt":"2016-12-07T08:15:51","guid":{"rendered":"http:\/\/www.cultofmoney.com\/?p=2168"},"modified":"2016-12-06T08:24:51","modified_gmt":"2016-12-06T16:24:51","slug":"improve-credit-2017","status":"publish","type":"post","link":"https:\/\/www.cultofmoney.com\/improve-credit-2017\/","title":{"rendered":"How to Improve Your Credit in 2017"},"content":{"rendered":"<p><img loading=\"lazy\" decoding=\"async\" class=\"alignright size-medium wp-image-2169\" src=\"http:\/\/www.cultofmoney.com\/wp-content\/uploads\/2016\/12\/how-to-improve-your-credit-in-2017-179x300.png\" alt=\"Are you setting big financial goals for the New Year? If so, here's what you should know to improve your credit in 2017 and beyond.\" width=\"179\" height=\"300\" srcset=\"https:\/\/www.cultofmoney.com\/wp-content\/uploads\/2016\/12\/how-to-improve-your-credit-in-2017-179x300.png 179w, https:\/\/www.cultofmoney.com\/wp-content\/uploads\/2016\/12\/how-to-improve-your-credit-in-2017-611x1024.png 611w, https:\/\/www.cultofmoney.com\/wp-content\/uploads\/2016\/12\/how-to-improve-your-credit-in-2017.png 764w\" sizes=\"(max-width: 179px) 100vw, 179px\" \/>With the New Year ahead many ambitious goals will be set. If one of your goals is to straighten out your finances, <a href=\"http:\/\/www.cultofmoney.com\/2012\/01\/22\/your-credit-rating-can-cost-or-save-you-thousands-of-dollars\/\">improving your credit score<\/a> might be on your list.<\/p>\n<p>Improving your credit score is a great idea since it can <a href=\"http:\/\/www.cultofmoney.com\/2016\/03\/30\/get-best-car-insurance-rates\/\">affect your insurance rates<\/a>, housing opportunities and ability to take on a mortgage. While a higher credit score won\u2019t happen instantly there are a few simple things you can do to see big improvements through the course of the year.<\/p>\n<p>Here\u2019s how to improve your credit in 2017 and beyond.<\/p>\n<h2>Know How Your Score is Calculated<\/h2>\n<p>In order to improve your credit it\u2019s helpful to first know how your score is calculated.<\/p>\n<p>The three credit bureaus use information from your credit report and calculate your score based on these metrics:<\/p>\n<ul>\n<li>Payment History 35%<\/li>\n<li>Amount Owed 30%<\/li>\n<li>Length of History 15%<\/li>\n<li>New Credit 10%<\/li>\n<li>Type of Credit 10%<\/li>\n<\/ul>\n<p>You can get your credit reports for free, once per year from each of the major credit bureaus. Simply visit <a href=\"http:\/\/annualcreditreport.com\/\" target=\"_blank\" rel=\"noopener\">AnnualCreditReport.com<\/a> to access those. You can track improvements in your credit score through a service like Credit Karma or Credit Sesame. However, it\u2019s important to note that these service don\u2019t give you your actual FICO score.<\/p>\n<p>To get your FICO score you\u2019ll need to pay for it at one of the major credit bureaus, Experian, Equifax or Transunion.<\/p>\n<h2>Always Pay Your Bills On Time<\/h2>\n<p>Your payment history is the biggest factor in determining your credit score. This means if you\u2019ve missed payments or paid your bills late your credit score has taken a ding or two.<\/p>\n<p>While you can\u2019t immediately fix this you can make significant progress by always paying your bills on time. Even if you can only cover the minimum payment you need to make sure it gets where it needs to be by the due date.<\/p>\n<p>To prevent missed or late payments set up all of your credit accounts to have the minimum payments automatically drafted from your checking account. You can always send in extra payments on the accounts at any time.<\/p>\n<h2>Pay Down Your Debt<\/h2>\n<p>The second largest component in your credit score is the amount you owe, or your debt to credit utilization ratio. This means the credit bureaus look at how much debt you have compared to how much credit is available to you.<\/p>\n<p>To figure out your debt to credit ratio you simply divide your debt by your available credit. For instance if you have one credit card that has a $3,000 balance and a $4,500 credit limit your debt to credit ratio would be 67%.<\/p>\n<p>According to FICO <strong>an ideal debt to credit ratio is below 30%.<\/strong> If your number is currently higher you need to work on paying down your debt until you get below the 30% mark. (I personally don\u2019t like to be higher than 15%.)<\/p>\n<p>Paying down your debt can positively impact your credit score fairly quickly.<\/p>\n<p><a href=\"http:\/\/www.cultofmoney.com\/2016\/01\/27\/5-steps-to-paying-off-credit-card-debt\/\">Paying down debt<\/a> will require you to cut back your spending, increase your income or both. Make a plan now on how you\u2019ll tackle your debt in 2017.<\/p>\n<h2>Don\u2019t Open Any New Credit Accounts<\/h2>\n<p>While you\u2019re working on improving your credit score you should not open any new credit accounts unless absolutely necessary. Applying for new lines of credit can have an adverse effect on your credit score.<\/p>\n<p>Instead, work on improving your credit so that when the time comes that you need to buy a house or take on debt for any other major purchase you\u2019re in a good position.<\/p>\n<p>Also, this should go without saying but DO NOT rack up anymore debt on the credit accounts you already have. You should focus on eliminating debt and avoiding taking on anymore.<\/p>\n<h2>Don\u2019t Cancel Old Credit Card Accounts<\/h2>\n<p>The length of your credit history accounts for 15% of your score. That means the credit card accounts you\u2019ve had opened the longest are the biggest influence on this calculation. If you close those accounts this portion of your credit score could be negatively impacted.<\/p>\n<h2>Stay Consistent and Be Patient<\/h2>\n<p>You\u2019ll find many articles claiming that you can raise your credit score by 300 points in six months. But remember, what sounds too good to be true is usually too good to be true. Instead of looking for that next method that will get you there fast do what makes sense.<\/p>\n<p>If you have a lot of debt paying it down, refraining from opening new accounts and consistently paying all of your bills on time will raise your credit score.<\/p>\n<p style=\"text-align: center;\"><em><strong>Do you plan on working on your credit this coming year?<\/strong><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>With the New Year ahead many ambitious goals will be set. If one of your goals is to straighten out your finances, improving your credit score might be on your list. Improving your credit score is a great idea since it can affect your insurance rates, housing opportunities and ability to take on a mortgage. [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":2169,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"om_disable_all_campaigns":false,"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[36],"tags":[176,633,236,632],"acf":[],"_links":{"self":[{"href":"https:\/\/www.cultofmoney.com\/wp-json\/wp\/v2\/posts\/2168"}],"collection":[{"href":"https:\/\/www.cultofmoney.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.cultofmoney.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.cultofmoney.com\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.cultofmoney.com\/wp-json\/wp\/v2\/comments?post=2168"}],"version-history":[{"count":0,"href":"https:\/\/www.cultofmoney.com\/wp-json\/wp\/v2\/posts\/2168\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.cultofmoney.com\/wp-json\/wp\/v2\/media\/2169"}],"wp:attachment":[{"href":"https:\/\/www.cultofmoney.com\/wp-json\/wp\/v2\/media?parent=2168"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.cultofmoney.com\/wp-json\/wp\/v2\/categories?post=2168"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.cultofmoney.com\/wp-json\/wp\/v2\/tags?post=2168"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}