Credit scores are kind of like grades for grown-ups: You receive a number somewhere between 300-850 that determines interest rates for loans, how much you pay for car insurance and even whether you can get a job. Because so much factors on this three-digit number, it can be extremely intimidating to realize your credit score is less than perfect. If you’re ready to lift that number up a little higher, check out these four tips that will help you start building back up your credit score. 

1.       Check for Errors: Everyone makes mistakes and that includes the credit bureaus. If you don’t understand why your credit score is so low, and you believe you haven’t done anything to cause a drop in your FICO, then it’s time to get a credit report and start searching for errors. You can always stop by and FCU branch and get a free credit report analysis, where we show you what’s affecting your score and how to begin fixing it. If you do find errors, then immediately start the process for having them corrected.

2.       Pay Bills On Time: It might seem a little obvious, but having late payments can really hurt your credit score. Make sure you pay all your bills on time if you want to avoid having those bills go to collections. One great way to do this is to set up automatic payments so you never have to worry about those payments being missed. FCU’s Bill Payer service can help you organize all those automatic payments into one place; check out the Bill Payer tab in Online Banking to sign up!

3.       Don’t have a credit card? Get One: While you may pay bills on time and have little to no debt, if you’re lacking in revolving credit (credit cards), your credit score probably isn’t the greatest. Apply for a secured or credit-building unsecured card so you can start building your credit history. And don’t be fooled by misconceptions: You do NOT need to keep a balance on your card to gain credit, and you absolutely shouldn’t. Instead, pay the card off at the end of the month and watch your credit quickly improve.

4.       Don’t Max Out Credit Cards: Having a credit card can really improve your credit score, but as we explained in a previous article, how much room you have left to spend on that card is important. Never max out your credit cards and, in fact, try to maintain your balance at below 30% of your total credit line.

Have you struggled with a low credit score? How did you improve it? Let us know in the comments below!

To regain a healthy financial situation, paying off debt and developing a cushioned savings account are both important. But what financial experts constantly debate over is which one should take first priority. If someone living paycheck-to-paycheck were to suddenly acquire money (whether a lump sum or an increase in pay from a new or secondary job), where should that extra income go? While both tasks are necessary in the long run, we’ve come up with a couple questions to ask yourself before you decide where to invest the extra cash.

Do I have an emergency savings?

Did you know that, according to CreditDonkey.com, 41% of Americans have less than $500 in their emergency fund? No matter what your financial situation is, everyone should have something stored in a savings account, specific for those odd emergency expenses. Whether it seems more financially savvy to pay off debt or not, having a financial cushion for things like root canals, car repairs or hospital visits can mean not having to throw more debt back on top of your credit card.

Is my debt’s interest higher than my savings account’s interest?

If you do have an emergency fund, then this is when it’s time to think about the math – if you’re dishing out interest on a credit card at 22%, but your savings account is only earning you 2%, clearly it’s a wise decision to pay off some of your debt. Strive to eliminate your balance as quickly as possible so that when you do start saving, your money isn’t wasted. However, if you have a low rate loan, like a low-interest student loan, it might be wise to start saving sooner rather than later.

Do I have a big purchase coming up?

Just because something makes financial sense, doesn’t mean it could be the perfect solution for your situation. Do you have plans to open a business, buy a home or even travel? These sorts of things require a big amount of cash, and while it might be nice to go into your new home debt free, if you don’t have the money for a down payment, you’ll have to wait even longer to move.

What do you think – should you save first, or get rid of your debt? Tell us about it in the comments below!

If you like this article, be sure to check out “3 Steps to Digging Out of Debt.”