Boost Your Credit Score
[music] JEN: Oh, good! [doorbell rings] CREDIT SQUIRREL: Yes? JEN: Credit Squirrel! Hey! I need some help building my credit score… CREDIT SQUIRREL: Shh! Yes, of course. Come in! JEN: Um, okay… CREDIT SQUIRREL: Right. Here are a seven ways to build
and maintain good credit scores. Number one, pay your bills on time. Don't hide them,
and don't pretend they don't exist. Pay your statement balance in full each month. JEN: That's simple enough. CREDIT SQUIRREL: Number two, part of your
credit score is based on the length of your credit history. So, if you're just starting out, open one credit card and use it for small, regular, manageable payments. Like a cell phone bill or gas. JEN: Okay. Something I know I can pay off every month. CREDIT SQUIRREL: Indeed. Three, keep your credit utilization low. This means using only a small portion
of your available credit. JEN: I don't think I understand. CREDIT SQUIRREL: Example! If you have $1,000 of credit available and
you're using almost all of it each month, it makes you look as though
you rely heavily on that credit line.
Keeping your utilization down to about 10%
keeps your credit score in tip-top shape. JEN: 10% utilization. Got it! CREDIT SQUIRREL: Four, don't open a large
amount of credit cards in a short time. Lots of inquiries on your credit report within
a short time frame makes your score drop. Five, to give your score an extra boost,
have a variety of credit. A mix of credit cards, retail cards,
utility bills, and installment loans keeps your score balanced. JEN: Nice! CREDIT SQUIRREL: Six, try not to carry a balance. Pay off your statement balance every month. JEN: What if I can't afford to do that? CREDIT SQUIRREL: If you can't afford to
pay something off in a month, you probably shouldn't be putting it
on a credit card in the first place. A credit card shouldn't be treated
like extra income. Budget wisely. Making only the minimum payments
each month can get you in trouble very quickly with all the interest you have to pay. JEN: Yikes! CREDIT SQUIRREL: And finally,
number seven, monitor your credit. There are free sites that you can use
to get a good estimate of your credit score, as well as paid services to access the exact scores.
JEN: That's really great! Thank you so much, Credit Squirrel. Once again, you've been incredibly helpful. Oh! I was just getting advice from
the Credit Squirrel. He lives in this tree and… Uh… You know what? Never mind. [music] Everybody can go away now..
