Although it’s not the end of the world, bad credit can be stressful and costly. However, you can repair this scenario, though it will take you some time and hard work. That said, you don’t have all the time in the world because you might need an unexpected loan from the various lenders and creditors, and your credit score will certainly be a significant factor. With that in mind, we’ve put together some quick tips to improve your credit score that you could benefit from.
Have payment reminders
Paying off your credit on time is arguably the most important factor contributing to your credit score. Some lenders will even go as far as offering you payment reminders via emails or text message. You can also consider the option of enrolling in automatic payment from your credit card if you don’t want constant reminders. However, this will only make the minimum payment set on your credit card, hence showing off poor money management skills. In conclusion, any time you skip paying your credit, the credit score automatically goes down.
Only take necessary credit
One of the most common mistakes made by most people is going for a credit they actually don’t need. Any time you apply for a loan your credit score points reduce as the inquiries are saved in the credit report. Therefore, avoid making too many inquiries within a short period as this will ultimately make your credit score go south. The only solution to this scenario is to apply for credit when needed.
Keep accurate credit report
Ensuring that you keep an accurate credit report is also another surefire tip to improve your credit score. In some countries, consumers have a right to at least one credit report copy from major credit bureaus. Once you get your report, read it very carefully to make sure all the details are correctly recorded. If you notice any inaccurate information, quickly report it to the responsible credit bureau to have it corrected immediately. If you don’t do this, chances of getting any future credit are reduced because of the harm caused to your credit score.
Pay more than the outstanding debt balance
Paying more than you agreed to pay on each installment amount can have several benefits. Apart from clearing your credit balance faster, this can help reduce your overall debt load. If you have multiple credit cards of debt balance, making substantial payments on a specific account while at the same time continuing to reduce the others is very important in helping you maintain focus on repaying all these credits. Once you’ve fully repaid one balance, you can now proceed to repay another one until they’re all cleared.
Pay off your debts
Rather than just moving your debt around, it’s advisable to pay it off. This is because the credit score can be determined by looking at the amount owed compared to the total credit available. The total credit available is also known as the open credit utilization rate. Also, utilization is the amount of the available credit being used, which involves each credit card percentage as well as the total available credit’s percentage. In short, most borrowers will look at your utilization ratio, with high utilization rate equating to a lower credit score.
Loans and credits have become a necessary part of our lives and having a solid credit history can have a huge impact on your financial life. If you follow the above guidelines, you can be sure to have a consistent and good credit history, but it will definitely take you a lot of patience and discipline.