13% of high income earners have below average credit scores. Here’s how to boost yours

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It is time to increase this number.

Key points

  • Strong credit could make it easier to borrow money at an affordable price.
  • New data reveals that even the highest earners struggle to maintain good credit.
  • You can take simple steps to improve your credit, including paying your bills on time and reducing your debt.

Your credit score is by no means a random number. Rather, it is a measure of how quickly and reliably you pay your bills and how well you manage your various credit card accounts and debts.

There are several factors that could lead to a less than stellar credit score. If you’re forced to rack up a large balance on your credit card due to an emergency expense, that alone could lower your credit score. And if you run into a financial crisis and fall behind with even a single credit card payment, that too could cause a world of damage.

But recent data from financial media outlet PYMNTS reveals that it’s not just low-income people who are struggling with their credit scores. On the contrary, one-third of people earning more than $250,000 a year report having an average or below-average score. And 13% of those earning more than $250,000 specifically say they score below average.

If your credit score needs improvement, there are a number of steps you can take to improve it. And the sooner you do it, the better.

1. Pay all bills on time

Your payment history carries more weight than any other factor that goes into your credit score, so just paying your bills on time, all the time, could make a big difference. Take note of when your various bills are due so you don’t miss them due to negligence. And try to fill up your savings account so you don’t end up late with payments due to a lack of money.

2. Reduce your credit card debt

Having a credit card balance that’s too high compared to your total spending limit could lower your credit score. If you have a higher income, you may be able to cut back on some expenses to free up money from your paychecks to reduce your existing balances. This could lower your credit utilization ratio, which could, in turn, increase your score.

3. Check your credit report carefully

When was the last time you reviewed your credit report in detail? If you can’t remember, now is a good time to access your free copy and start reading it (you are entitled to a free copy of your credit report once a year from each of the three major credit bureaus). ‘Evaluation). A mistake on your credit report, such as an overdue debt that isn’t really yours, could drop your score significantly, and that’s the kind of thing you’ll want to fix.

Don’t settle for bad credit

Being a higher earner means you may have some financial opportunities to look forward to, such as buying a house. But if your credit score is low, you might struggle to meet the goals you set for yourself.

If your credit score needs work, it’s worth investing the time and energy to improve it. You never know when you might need to borrow money, and the higher your credit score, the easier it will be for you to do so affordably.

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