How To Improve Your Credit Score
Having a bad credit score will make you not access financing from financial institutions easily. However, if your credit score is bad, it is not the end of the world.
Steps to help improve your credit score
1. Take note of your credit card balances
A major determinant of one’s credit score is the much credit they have compared to how much they use. If one has a smaller percentage of this, it makes their credit score rating better. One should be careful to maintain their balances at lower levels. It is better if the credit card issuer can accept payments throughout the month as opposed to a single payment monthly.
2. Get rid of the credit card balances
Most people have more than one credit card. They end up having very many small balances of the different credit card they hold. These small balances end up hurting one’s credit score. The easiest way of dealing with these is getting rid of them. One should find a way of paying off these small balances. They can then select one or two credit cards they can use.
3. Let the old debt stay on your credit report
Most people think that once they finish paying off debt, it should be gotten rid of from the report. However, this is not such a good idea. Items having a negative figure will be eventually removed from their report after seven years. These good old debts should be left on the report. This is because the longer the history of good debt the better the rating for their score is. One should also not close their accounts which have a good repayment report since this is necessary to be shown on your report.
4. Put to use your calendar
When shopping for an asset to buy, they should shop for the rate within a very short period. Applying for credit will cause your score to go a bit lower. When someone makes many credit applications, it means they use more credit than they should.
5. Use your calendar
If you’re shopping for a home, car or student loan, it pays to do your rate shopping within a short period. For mortgage, student and auto loans, they have a different scoring formula which allows one to take only one loan but with multiple applications. The most common credit score used by lenders will tend to ignore inquiries made thirty days before the score. How much time you have for shopping will depend on the score used.
6. Paying your bills on time
One should always aim at paying their bills on time irrespective of the fact that they are trying to save for some major purchase. If one does not pay their bills on time, it affects their credit score badly.
7. Don’t put yourself at risk
To improve your score do not put yourself at a risk of making your score bad. This can be done by being irregular in the repayments like paying this month and skipping the next; the other would be paying less than what you are supposed to pay. This will eventually hurt your credit score.