For all the chatter about what millennials could learn from their baby boomer parents about money, many boomers are up the creek without a paddle when it comes to maintaining certain aspects of their own finances, like their credit scores. Indeed, boomers could learn a good lesson from their parents, members of what some historians call the “Greatest Generation.” This demographic boasts the highest average VantageScore (735), the lowest average debt ($23,245) and the lowest revolving utilization ratio (16 percent), according to 2013 data from Experian.
On the other hand, Experian data shows the baby boomer generation has the highest average credit card balance at $5,347 and the highest average number of credit cards (2.66). Also, this generation’s average credit score is 700 — not terrible, but not amazing, either.
So, how can boomers buck up their credit scores? Start with these 19 “can’t miss” tips.
19 Best Ways for Baby Boomers to Build Credit
1. Look at your credit report
Start by requesting your credit report to find out what your credit score is. You can request a free report once a year, or you can purchase one whenever you need to through the three national credit bureaus: Experian, TransUnion or Equifax.
Related: 4 Credit Report Red Flags You Don’t See — But Your Lender Does
2. Know what credit score you need to have
Your credit score ranges from 300 to 850, and every lender has a different classification of what is “good” or “bad” credit. But generally speaking, if your score is above 720, you’re in great shape as far as banks and mortgage brokers are concerned. A credit score of 620 tends to be the drawing line for most creditors — below that you’ll likely face higher-than-usual interest rates. And if your score is too much below, you might be denied a credit card or mortgage.
3. Check for errors on your credit report
If you think your credit score is too low, check carefully for any errors such as accounts that aren’t yours, late payments that you know you paid on time and debts you’ve already paid off that are listed as outstanding. Certain negative information should be deleted from your credit report after seven or 10 years.
4. Pay bills on time
The key to good credit is paying your bills on time, keeping account balances low and only taking out new credit when you need it. Set up automatic payments with your bank so your bills all get paid before they’re due.
5. Watch out for high credit card balances
High balances do make a difference. If you have outstanding balances, start chipping away at those. It’s a surefire way to raise your credit rating. Many credit card companies report to the bureaus every 30 days, so if you’re diligent about paying down those balances, you can see an upturn in your credit score in as little as two or three months.
6. Keep it positive
Know that positive actions are also factored into your score. For example, on-time payments can have a positive effect on your credit score.
7. Protect yourself from scams
Beware of websites that offer credit-monitoring products or services for a high fee and credit repair scams. Some of these sites might be scams designed to steal your personal information. If your information becomes stolen, the scam artist might be able to hurt your credit by charging or opening accounts.
8. Don’t open new credit accounts you don’t need
Each new account can lower your average account age, which could actually lower your credit score. Your score can also be lowered if you open several accounts in a short period of time — lenders might believe you’re a greater credit risk.
9. Remember the “60-day” rule
Even if you’re in a bind, try not to let your payments go 60 days past due. Some lenders don’t report balances that are 30 days past due, but they might report a delinquency once it goes past two cycles.
10. Know the credit card “cut” rule
If you decide to cut up credit cards, leave the oldest one open. That’s because the length of your credit history is another factor in your score. The longer your credit history, the greater your credit score.
Read: 10 Signs You Own Too Many Credit Cards
11. Watch out for repeated credit inquiries
Each time you apply for credit and a creditor requests your credit report, a few points might be deducted on the theory that you are adding to your potential monthly obligations.
12. Limit pre-approved credit cards
If you have a history of signing up for pre-approved credit cards you get in the mail, you could be negatively impacting your credit. Filling out the credit card application forms can result in credit inquiries, and too many inquiries can decrease your credit score.
13. Cut a deal with your creditor
You can’t change the fact that you paid a bill late, but you could possibly ask your creditor to set up a payment agreement with you. That way, you can prevent the bill being sent to collections, which saves you from dealing with a slew of other problems regarding your credit.
14. Keep your credit card usage low
Make sure your credit card use is limited to a 30 to 25 percent-or-under utilization rate. Keep it under 10 percent to maximize credit effectiveness.
15. Increase your credit limit
Reach out to your credit card company to increase your limit, but don’t hike your spending. Having a higher credit limit, while keeping spending low, can help boost your credit score.
16. Watch your spending
Build a household budget and stick to it. Lower spending is a proven way to increase income – income you’ll need to pay household bills and improve your credit. Make no mistake: Creditors tend to love savers because they’re much lower credit risks.
17. Build an emergency fund
Create a rainy day fund of about six months’ worth of your annual income. That way, if you do run into a rough financial patch, you’ll have the means to pay your bills and keep your credit score healthy.
18. Know your bill payment dates
Know all of your payment dates, and pay a week ahead of time. This can ensure your payments are recorded on time and your credit is protected. Again, schedule automatic payments so you won’t miss any.
19. Keep your creditors in the loop
If you do fall behind on your payments, contact your lenders and creditors right away. Many creditors can help you set up a payment plan to help you keep your credit in good standing.
Keep reading: How Boomers Can Avoid Becoming Financial Burdens on Their Kids
Baby boomers will need all the financial help that a good credit score can provide. Follow the tips above to give your credit the power boost it needs to put you in good financial standing.
This article originally appeared on GOBankingRates.com: 19 Easy Ways Baby Boomers Can Build Their Credit
This article by Brian O’Connell first appeared on GoBankingRates.com and was distributed by the Personal Finance Syndication Network.
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