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Tips for improving your credit score

Tennessee residents who are facing debt problems will, in general, probably do their best to find a solution. Many will set up a household budget and stick to it, devoting a significant portion of their monthly income to paying down debt. Repaying the credit card debt in full is obviously the main goal, but there are other ways to improve a credit score.

As a recent article noted, there are two main things that determine your credit score: whether you make your payments on time, and how much of your total credit availability you are using. Paying the monthly bills on time is probably the easiest way to make sure that your credit score is improving.

But, keeping an eye on what is known as "credit utilization" is also important. This doesn't have to be too hard. Basically, if you take a look at your credit limit on each of your credit cards and then add up the total, that is your available credit. Then, look at how much of a balance you have on revolving debt. So, for instance, if you have a total credit limit on all of your credit cards of $50,000 and you have $5,000 in debt, your credit utilization would be 10 percent.

However, for those Tennessee residents who are facing debt problems that may feel overwhelming, filing for bankruptcy might be the more appropriate long-term approach to reviving a credit score. Yes, in the short term the credit score will take a serious hit from the bankruptcy, but if you achieve debt relief you can begin a road toward a better financial future.

Source: The Motley Fool, "Here's a Fast, Simple Way to Improve Your Credit Score," Nathan Hamilton, June 8, 2017

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Kenneth C. Rannick, P.C.
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