A credit score is kind of like a grade for being wise with your finances. It is issued by credit agencies as a number between 300 and 850. The higher the number, the better the credit score. A 700 or above, is generally defined as a good score. This helps bankers, lenders and credit card companies make their lending decisions.

You can take steps to improve your score. Here are three things I recommend, specifically related to credit cards, that can make a big difference.

  • Keep your credit card balances low. The goal is to only purchase things you can afford and pay your balance off monthly.
  • Make payments on time. Not making payments on time will negatively impact your credit score, and lead to additional finance charges. If you have difficulty remembering to make your payments on time, set up automatic deductions from your checking account.
  • Maintain your credit history. It’s a good idea to keep two to three credit cards open for an extended period of time to show that you’re credit worthy. And don’t forget to keep your balances low and make your payments on time.

Did you know you can request a free copy of your credit report annually from the three major credit bureaus? Take a few minutes to request your copy. It’s always a good idea to know where you stand.

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