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Tips for Building Your Credit Score

There’s a certain three-digit number that can make all the difference between being denied or approved for credit, and whether you’ll receive a low or high interest rate. That number is called a credit score, and it’s derived from your payment history, accounts owed, length of credit history, types of credit used, and other factors.

Many of the credit-related decisions you make can have an impact on your credit score. For example, skipping a payment on a credit card bill can have a negative impact on your score. Your credit score defines you financially, and if you do something to negatively impact it, you could face a risky financial future with poor credit.

“A low score warns lenders that you might be an unreliable borrower, which can thwart you from getting the credit you need,” writes Credit Karma contributor Jenna Lee. “A high credit score can save you tens of thousands of dollars in interest over the life of your loans.”

So how can you build up your score in the unfortunate event it’s not where you’d hoped? Read on for advice on improving your credit score.

Get rid of small balances on several cards. Do away with small, unnecessary balances. The less polluted your credit report is, the better.

Since your credit score takes into account how many of your cards have balances, charging a few dollars on one card and then a few on another, instead of using the same card to make multiple purchases, can negatively impact your credit score. To build your score up again, pay off all the small balances you have on your cards, and then use just one or two cards for the majority of your everyday purchases.

Pay bills on time. If you’re skipping payments or paying them late, your credit will suffer.

If you’re struggling to pay bills by their deadlines, try setting reminders on your smartphone or leaving sticky notes on your desk with the payment information and deadline for all your bills. You can also hire a financial planner, or see if your bank offers a bill pay feature, like Kleberg Bank does, to help you make those payments on time and in full.

Keep old debt. It sounds counterintuitive, but it’s actually better for your credit score if you leave old debt on your report. Some of that debt is good for your score, and trying to get older accounts off your credit score simply due to the fact that they’re paid off isn’t wise either.

Why? The longer your history of good debt, the better it is for your credit score. When you attempt to eliminate old good debt, it’s like getting great grades throughout school and trying to get your records erased down the line. You want to keep it around.

Get rid of student loans. If feasible, try to pay off those pesky student loans in a timely manner.

Paying on time and in full monthly will show credit bureaus and future lenders you are responsible can be trusted with money.

Keep new accounts to a minimum. Every time you open a regular or retail credit card, or even just apply for one, your report is looked at to determine whether or not you’ll receive the credit.

If you’re applying for multiple cards at once, it may appear to credit bureaus that you aren’t being approved for credit and therefore shopping around too much. It’s best to keep these applications to a minimum to avoid any misinterpretation.

Bottom line: Remain trustworthy and responsible. Your credit score is an important part of your financial success, so take care of it.

If you need help using Kleberg Bank’s Bill Pay services or are ready to open a personal credit card, call 361-850-6800 or visit