Understanding Credit Scores

A credit score is a numerical representation of your creditworthiness, usually ranging from 300 to 850. Factors that influence your score include:

• Payment history
• Credit utilization ratio
• Length of credit history
• New credit inquiries
• Types of credit used

Steps to Improve Your Credit Score in Sacramento

1. Check Your Credit Report

Start by obtaining your free credit report from the three major credit bureaus: Equifax, Experian, and TransUnion. Review your report carefully for any inaccuracies or errors that could be negatively impacting your score.

2. Pay Your Bills on Time

Your payment history is one of the most significant factors affecting your credit score. Set up reminders or automate payments to ensure you’re never late.

3. Reduce Your Credit Utilization

Try to keep your credit utilization ratio below 30%. This means that if you have a total credit limit of $10,000, you should aim to keep your balances below $3,000.

4. Avoid Opening New Credit Accounts Too Frequently

Each time you apply for a new credit account, a hard inquiry is made on your report, which can temporarily lower your score. Be strategic about when you apply for new credit.

5. Consider Credit Counseling

If you’re struggling to manage your debt, consider reaching out to a reputable credit counseling agency in Sacramento that can help you develop a personalized plan to improve your credit score.

Resources in Sacramento

There are numerous resources available in Sacramento to assist with credit score improvement:

• Credit Union Assistance: Check with local credit unions, which often provide financial counseling and services.
• Non-Profit Organizations: Seek help from organizations like the Sacramento Region Community Foundation.
• Online Tools: Websites like Credit Karma offer free credit score tracking.