Welcome back to our blog series on maintaining and achieving a good credit score! In the first blog of our series, we broke down the essential pieces of having a good credit score, and why this is important. There are so many opportunities that can present themselves when you have a credit score that speaks to your financial reliability. Not only are your financial possibilities expanded, but your capabilities are as well.

A good credit score isn’t something you can simply will into existence, but it is something that is nearly a necessity to have. If you find yourself suddenly in need of a new car, you’ll be wanting a good credit score. When you’re looking for a place to live, you’ll be wanting a good credit score. Even wanting electricity and water can boil down to needing a good credit score.

Because having (and maintaining) a good credit score is so important, it’s vital to understand how you can make this happen. Whether you’re not wanting to check your FICO® score out of fear for seeing some numbers starting with a 3 or 4, or feeling ready to push your way into the next range of your credit score assessment, First Western Federal Savings Bank can provide you some tips and tools to make this happen.

As the premier choice for getting a non-recourse loan to be used towards purchasing a rental property, First Western Federal Savings Bank has been helping people build their financial portfolio for over three decades. There’s no better time to get your credit score in check, and to see the possibilities that await through getting a non-recourse loan! Find out more on managing a good credit score, and contact First Western Federal Savings Bank to create a better financial future.

Know your baseline.

We know it can be scary and difficult, but take this as your sign: it’s time to check your credit score. People who don’t feel confident in their credit are likely not too keen on learning their score, which is understandable. But in order to grow and improve, you have to have a starting point, and you can’t let denial and fear hold you back.

If you have a credit card currently, there’s a good chance you can use that site to get a reading. Don’t have a credit card or an online bank system that can provide this information? No problem. There are plenty of sites, such as Credit Karma, that can provide you with a free credit report. Utilize various resources to find your current credit score, and refer back to our chart to find out where you stack up.

If you don’t have a credit score: In some instances, people might never have had to take out a loan or have never used a credit card. If this is the case, one of the best ways you can begin to build your credit is by simply applying for a credit card. Once accepted, use your credit card for various payments, such as buying gas or groceries. It will definitely take time to build up your score, but through consistent and smaller payments, this lays a great foundation for your potential FICO score. But as we’ve talked about, it is imperative that you pay off your credit card bill in a timely fashion in order to develop a credit card score that’s worth its salt.

Aim for (slightly) higher.

Of course we all want to have the best credit score possible, but that might take several leaps to get there, and you could easily trip along the way. In order to make consistent and sustainable growth, take your baseline, and aim for the next level up. It can seem impossibly slow and gradual, and might seem tedious to simply set your mind on advancing to “Fair” if you’re currently at “Very Poor.” Yet as we’ve talked about, building a credit score requires time—set your sights a little closer for the time being. Once you hit your initial goal, you can always step it up a notch (as you should!)

If you already have an exceptional score: Wow, way to go! You’re in the 20 percent of people in the United States who have the highest ranking score. You should continue doing what you’re doing, and if anything, use your existing score to look into some further financial ventures. Your fiscal responsibility speaks volumes to your financial capabilities, and you could very well grow your capital to even greater heights. Talk with our team at First Western Federal Savings Bank about getting a non-recourse loan; we would love to hear from you.

Practice consistency.

The road to a good credit score is a long one, and one that we’re constantly on. Just like we take our Toyotas in for routine oil changes, add fuel to our Fords, and get checkups on our Chevys when the time calls for it, we have to do the same for our credit score. The cheesy car metaphors might seem like overkill, but truly, your credit score is similar to your vehicle: when it’s good, it can take you places. When it’s in bad shape, you’ll find yourself stuck.

By practicing consistency, you’ll be taking the necessary steps to improve your credit score. Here are some ways to make that happen:

  • Pay off things on time:  Even before you have a credit card bill or a loan payment due, make sure you’re ready to pay it (and honestly, we recommend paying it before the due date just in case). Set an alarm on your phone, or set up automatic withdrawal from your bank account that pays things before you even have to think about remembering. Making timely payments is one of the most important things you can do in improving a credit score.
  • Use credit, but don’t depend on it: If the amount of money you owe is currently abysmal, try to focus more on paying it off than using credit. As another financial faux pas, if you max out one credit card, do not take out another card. This is adding onto your debt, which will make paying things off all the more difficult.
    If your credit balance is looking more manageable, you can continue using your credit card to make payments. Again, make sure you’re able to make timely payments, and pay off more than you’re spending to see a difference in your balance as a whole.

When you maintain and improve your credit score, it’s more than just having opportunities that await—it’s being able to afford some of the necessities in life. But once those basic needs—such as shelter and a means of transportation—are met, you can begin thinking about growing your financial portfolio. With a good credit score and a self-directed IRA, you could be eligible for getting a non-recourse loan through First Western Federal Savings Bank. Just as we have had the privilege of helping people reach new financial heights for over 30 years, we would be honored to work with you. Learn more about acquiring a rental property with a non-recourse loan, and contact First Western Federal Savings Bank to see what this type of IRA loan could do for you!