Financial Calculators

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Having a good credit score is the key to financial freedom. The better your score, the more lenders trust that you will pay the money back. Here are five tips on building and maintaining a solid credit score to help you reach your financial goals

Pay your bills on time – every time. Payment history and a track record of paying your bills on time is one of the key factors credit bureaus assess when calculating your score. Keep those payments on time and avoid late payments at all costs.

Aim to use less than 30% of the credit available to you. This is more of a myth than a hard-and-fast rule. Understandably, the less credit you use, the better. Known as the credit utilization ratio, credit experts agree below 30% is a great guideline to follow.

Hang on to older credit. Your history of accounts matters when it comes to your credit score. If you have older accounts – even ones you don’t use – don’t get rid of them. Closing credit cards when you have a balance on others means lowering your total available credit. So keep those accounts open to help preserve your score.

Limit your requests for new credit. Every time there is a “hard” pull on your credit score, it impacts you for about two years. When you apply for any line of credit - whether it’s an auto loan, mortgage or new credit card - your credit is being pulled. When there are too many inquiries within a shorter period of time, lenders may interpret that you are facing financial difficulties and may not be as likely to lend. Soft inquiries, such as pulling your own credit or a new employer running a background check, does not impact your score. So just be aware when you really need that line of credit.

Give yourself some credit! Solarity offers share secured credit cards, which are a great way to begin building (or rebuilding) your credit history and credit score. A share secured Visa® allows you to use your savings to establish a credit limit you can borrow against as you would with a traditional credit card. It allows you to use your own savings (or any other Solarity account) as collateral for a specified loan amount, meaning the savings you dedicate to establish the credit limit will be unavailable to you until the card is closed. For example, you can dedicate $1,100 from your savings (10% down) to create a $1,000 line of credit at Solarity. As you make your monthly payments (plus interest), the principal portion of each payment is once again made available to you in your savings account. This means you are borrowing from yourself and demonstrating to the credit agencies that you can make regular monthly payments.