Did you know that a high credit score can reduce your insurance premiums? It is easy as 1…2…3.
Follow these steps, and you can watch your credit score increase and debt decrease.
Step 1) Check your Credit Report.
You can’t set a goal until you know where you are starting. Get a free credit report from the three major credit bureaus (TransUnion, Equifax, and Experian) at annualcreditreport.com. Review the reports and check it for any errors. If you do find amounts owed or accounts opened that shouldn’t be, correct those with the credit bureau. To learn how to dispute an error, click here.
Step 2) Make payments on time.
Once your reports are accurate it is time to make your payments on time. Delinquent payments and collections negatively impact your credit score. With our busy lives it is easy to forget. Setup automatic payment reminders or consider setting up automatic payments withdrawn from your checking account. The secret is out; pay your bills on time, and your credit score will reflect your faithfulness.
Step 3) Pay off that debt.
Even though you may have several cards with low balances, it is better to only have one or two credit cards, at most. Pay off the ones with low balance. Once a debt is paid off, it is okay to leave that on your credit report. Showing a strong repayment record is good. Consider making a payment on a card twice a month. The first payment to reduce the balance and the second payment to minimize interest paid.
Remember, it takes time to build a strong credit report. Be patient.
Don’t forget to notify your agent with your new shiny credit score during your annual insurance review. They would love to help you reduce your premiums anytime!