16 Easy Ways Baby Boomers Can Build Their Credit

We give Baby Boomers a lot of credit when it comes to finances. Their generation learned to save up if they wanted something, and many older parents this age have stepped in to support their grown children when they fall on financial hard times. Even so, Baby Boomers have the highest average credit card balance of any age group, and also the highest number of credit cards. There are a few things Baby Boomers can do to build their credit and make their financial standing as good as possible.

1. Check your credit report often.
There’s no way to know where you stand financially without checking your score! You can get a free report once a year from each of the major bureaus—Experian, Equifax and Transunion—therefore it won’t cost you anything if you check it with one of these bureaus every few months.

2. Look for credit report errors.

This could include accounts that aren’t yours, erroneous late payments and even accounts in collection that you thought you paid. If you spot any errors, dispute them with the credit bureaus immediately.

3. Know what makes a good credit score.
Your credit score can fall anywhere between 300 and 850, and each lender has a slightly different scale for measuring a “good” score. In general, a score above 720 is wonderful in the eyes of banks and lenders. Typically, a score lower than 620 will cause you to face higher interest rates and less-than-ideal loan terms.

4. Keep credit card balances low.
Ideally, your balances should fall below 30% of your card’s credit limit. If you have high credit card balances, start paying them down with a few extra dollars each month. It only takes a few months to lower your balance, which goes toward improving your credit score.

5. Pay on time each month.

Each and every late payment dings your credit score, even if you typically pay on time. If you find you have trouble remembering to make payments, set them up to automatically draft from your bank account each month.

6. Don’t neglect positive actions.

It’s not all about what negatively affects your score. Remember that your positive actions, like paying on time each month and keeping old accounts in good standing, also contribute to your good credit score.

7. Don’t open accounts you don’t need.

You probably know that new credit inquiries ding your score, but you also need to consider your average account age. Say you have two accounts that are each ten years old. Your average account age is ten years. If you open a new account, your average account age suddenly drops to 6.6 years.

8. Be vigilant for scams.
Credit monitoring services can be legitimate, but there are many out there that are scams. Look out for high fees or offers to consolidate your credit after you pay a hefty price up-front. The bottom line is this: if a financial offer sounds too good to be true, assume it is.

9. Don’t let payments go more than 60 days past due.
Of course you should always strive to pay on time, but sometimes financial emergencies put you in a bind. Even in these cases, do whatever you can to pay within 60 days of a bill’s due date. Some lenders have a grace period and won’t report you for one missed payment, but if a bill goes past 60 days due, they will likely report the account as delinquent.

10. Avoid repeat credit inquiries.
If you’re shopping for a new car, refinancing a mortgage or opening a new credit card, be sure to do all of your “shopping around” in the credit department within a 30-day window. If you spread out your credit applications more than that, it could appear to creditors that you’re shopping around for more credit to cover your regular monthly bills.

11. Cut up cards, but don’t close accounts.
Even if you decide to cut up your physical credit cards, leave those paid-off accounts open to keep your credit history strong.

12. Deal with your creditors.
If you’re falling behind on payments, don’t just let your late bills go on and on. Call your creditor and explain your situation. See if they will agree to an alternate payment plan, or even forgiving a portion of your balance.

13. Don’t respond to every offer.
Those “pre-approved” cards that come in the mail? They still ding your credit score when you fill out the full application form and return it. Avoid responding to these offers unless it’s one you legitimately could use.

14. Ask for higher credit limits.
One easy way to boost your credit score in just a few minutes is to call your credit card company and ask for a higher limit. If they agree, this automatically lowers your debt-to-credit ratio. Just be sure not to abuse your new higher credit limit.

15. Stick to a budget.
It sounds simple, but it’s a solution too many people ignore: spending less automatically means more income. Creditors love lending money to people with a track record of saving, because they’re low-risk customers.

16. Save for a rainy day
You should aim to have six months’ worth of expenses in an emergency fund in case of—just that—an emergency. If you do run into a financial hardship, you’ll be glad you put that money away.