by Chelsea Springli 
Establishing a healthy credit score can open many doors. From renting an apartment to getting a car loan to buying a home, your credit score can impact getting approved with a low rate.
Here are five steps to help you get started.
No Credit or Bad Credit? Build Your Score Wisely
Having no credit is often just as bad as poor credit to a lender because they have no idea how you will handle a line of credit if they were to give you a loan. Having no credit is a big question mark on your credit score.
If you have no credit history, build it wisely by applying for a credit card or financing all or at least some of your vehicle with an auto loan. This will give you a starting point and give you a credit score. Depending on the type of loan, it may take one to six months before you’ll have a documented score. With this in mind, focus on managing your loan well in those essential early months.
If you have colorful credit, you might consider a Credit Builder Loan or a Secured Credit Card (like the ones offered by Alltru). Just be sure to make all of your payments on time. Before you know it, you’ll have a positive credit history to show future lenders!
Choose a Credit Card Carefully
Before opening a new credit card, be sure to read the fine print and know exactly what you are signing up for. It’s always a good idea to compare a few different cards before making a final decision. Do you need a store credit card (like a Lowe’s or Kohl’s card) or a rewards credit card? Be sure that you are aware of all fees and your interest rate. At Alltru, we offer a great low-rate card or a rewards credit card depending on what you’re looking for. Compare our credit card options today.
Check Your Score Frequently
Even if you think your credit history is sufficient, things change. There could be an error on your credit report or your score could fluctuate depending on whether you make credit card payments on-time, among other factors. In addition to factors that are in your control, you should also check your scores to ensure you haven’t been a victim of identity theft.
I make it a consistent habit to monitor my scores each month with Credit Karma so that I’m never in the dark! You can also come into the credit union for a free, no-hassle debt review and we can take a look at your credit score with you.
Focus on Meeting Payment Deadlines
Making payments on time is one of the key factors to increasing or keeping a high and healthy credit score. If paying bills late is one of your bad habits, set up payment reminders and automatic payments through online and mobile banking. By automating the process, you’ll be able to make your payments on time and never miss a payment again.
In addition to setting up recurring reminders or payments, you must make sure you have enough money in your account in order to pay your bill. Be sure to create a realistic budget that allows you to have enough money in your accounts every month to pay your bill on time.
Reduce Your Debt
It’s easier said than done, but paying off an outstanding balance can be a great way to improve your credit score. Even if it’s reducing it by small amounts, it’s important to try to pay off debt. If you want a challenge, see if you can follow the debt snowball or debt avalanche strategy. These methods speed up your debt payoff timeline by planning to pay for more than your minimum loan payments.
Once you eliminate your debt, make it a priority to stay debt-free. This is possible by living below your means and saving an ample supply of money every month. That way, you’ll have money at your disposal when you need it more.
Create a Healthy Credit Score
Now is a great time to focus on your credit. Whether it’s paying your bills on time, reducing your debt, or just doing your annual credit check, these steps will put you on the path to good credit. Your future self, and your credit score, will thank you!
