• Crack the Code to Building a Solid Credit Score

    Crack the Code to Building a Solid Credit Score
    By Urjit Patel
    When it comes to big financial moves like buying a car or home, renting an apartment or taking out a personal loan, your credit score carries a lot of weight. The higher your score, the better your chances of getting good interest rates and loan terms.
    And rates and terms aren’t the only thing that your score can impact.  According to Credit Karma, the difference between a “poor” and “excellent” credit score is more than $200,000 over the average person’s lifetime.
    Here are some tips for boosting your score:

    • Establish a Track Record
    If you don’t have a credit history yet, some banks and credit unions will offer a “credit builder loan” to help you start one. The financial institution lends you money (typically $500 to $1,000) that you pay back via regular monthly payments, usually over a period of one to two years. You’ll also earn interest over the course of the loan.
    Another option is a secured credit card, which is backed by a cash deposit you make when you open an account. The account is usually equal to your credit limit, so if you deposit $500, you’ll have a $500 limit.
    If you use these options carefully, you can strengthen your score enough to qualify for other types of loans — like a revolving credit line or payment installments on a car, mortgage or business loan.
    • Stick to a Payment Schedule
    Consistency and good habits will get you far — whether it’s a credit account or a recurring payment like a utility bill. Every bill paid on time helps strengthen your score, while unpaid ones can stay on your credit report for years.
    It’s easy to stay on top of your cash flow with tools like Axiom Bank’s AxiomGO checkless checking account, which allows you to pay your bills and deposit checks from your mobile device. And Axiom’s Picture Pay online banking service allows you to set up one-time or recurring payments by simply taking a picture of the bill.
    • Put a Lid on Your Balance
    A healthy balance of credit usage is key. Try to use no more than 50% of your limit and pay the balance off before the due date each month. Making a second payment during a billing cycle can help you pay your debt more quickly — and sends a message to prospective lenders that you’re a disciplined money manager.
    • Keep Tabs on Your Credit Reports
    Set a calendar reminder for twice a year, and get your credit report from each of the three nationwide credit reporting agencies (Experian, Equifax and TransUnion). Check each one for errors, outdated information or incomplete records, and make a list of problem areas. Then, you can initiate a dispute with the reporting agency to resolve the issues.
    Considering how much your credit history can impact your life, it’s smart to take steps to raise your score. While credit can seem intimidating, it doesn’t need to be a total mystery. When you have the right information and a step-by-step plan, you can move confidently into your financial future.
    Urjit Patel is Executive Vice President of Consumer Banking at Axiom Bank, N.A., a nationally chartered community bank headquartered in Maitland. He can be reached at upatel@axiombanking.com or 321-972-3971.