There are several good career-related reasons to work on improving your credit score. Now that doesn’t mean you should avoid credit cards altogether. In fact, there are quite a few great credit card offers that can not only help you build your credit score (If used responsibly) but also reward you for doing so. Furthermore, if you’re hoping to start a business, having good personal credit can make you more attractive to lenders. Some companies actually do checks on potential hires. Furthermore, a messy credit record is just one more thing to worry about that can hinder your focus on your career.

Tips can help you tackle debt and increase your score

Review Your Credit Reports

You’re entitled to free annual reports, and you need to start by looking at them to determine what your credit score is and where you can improve. It’s also a good idea to do a yearly check to make sure there aren’t any errors on your report. You may be able to correct some, but even if you cannot, you can include a note disputing the claim. If there are any debts on the report that do belong to you, it’s time to tackle them.

Prioritize Debt

In dealing with debt, the best approach is usually to pay off the ones that have the highest interest rates first. In general, it’s a good idea to try to get rid of any credit card or medical debt. Focus on making minimum payments on everything else as you throw as much money as you can at your high-interest debts. As each one is paid off, you can then roll that money over to focus on the next one.

Student Loans

Student loans are a special case. First, unlike credit cards, the expectation is generally not that you will pay these off in a relatively short amount of time. Taking on student loans is usually a responsible way to pay for an education that will result in a higher income to make up for the debt and interest. However, there are things you can do to make paying these off less onerous. If you have multiple student loans, it can be confusing to try to keep up with them all. Consolidating student loans can lower your monthly payment and free up some money to throw at higher-interest, unsecured credit card debt.

Mortgages

Mortgages are similar to student loans in that when you assume them, you generally have a plan to pay them off in decades instead of years. They are also another form of “good” debt. You might be able to refinance your mortgage and reduce your interest rates, leading to lower monthly payments or a shorter mortgage term.

Hard Inquiries

A hard inquiry occurs when your credit score is checked by a lender. Both refinancing and consolidating can require hard inquiries. Hard inquiries can temporarily lower your score, but in the long run, the benefits of both generally outweigh the short-term drawbacks. However, you should be mindful of what actions will trigger hard inquiries and try to avoid incurring too many. Credit agencies do take into account that people may be shopping around for different lender offers and will usually count multiple inquiries in a short amount of time as a single inquiry.

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