How To Improve Your Credit Score: 10 Easy Tips.
It is essential you have a good credit score, otherwise, your loans and credit applications will always be denied. A bad credit score can affect you negatively.
Whether you used to have bad spending habits or whether you have been a victim of fraud, and you wish to improve your credit score, this guide will help.
In this article, I will show you how to improve your credit score easily.
First, before I show you how to improve your credit score, you need to determine which of your accounts needs improvement.
To do that, you first need to understand what a credit rating/report is all about, and then you need to get a copy of your credit report from at least two credit bureaus or agencies.
10 Easy Tips To Improve Your Credit Score
There are many tips that will help guide you on how to improve your credit score. However, here are 10 easy tips to improve your credit score that you should begin to do immediately.
1. Pay Bills On Time.
In the event of borrowing, lenders take their time to check your reliability in paying your bills and how prompt you are in making such payments by reviewing your past records of payments.
Making prompt payments helps in predicting future payments in relation to paying on time and gaining the trust of lenders.
Paying bills on time has a way of influencing your credit scores in a good way because of the reliability it builds in the minds of lenders towards you.
In the same way, not paying your bills on time would have a negative effect on your credit scores.
Payments whether late or prompt reflect on your credit report and so have a great impact on your credit score because it builds up a reputation that would encourage lenders to either trust you or not.
2. Make Cell Phone And Utility Payments On Time.
Making cell phone and utility payments on time also have a way of improving your credit scores which would be beneficial to you.
Your numerous bank accounts can be connected to the platform to enable a review of your previous cell phone payments and utility payments which creates a record that improves your credit scores.
3. Debt Payment and Keeping Credit Balances Low
In calculating credit score, utilizing credit ratio is a very important number and it is gotten by summing up all balances from your credit card and dividing it by the credit limit total.
In order to get the ratio of your average credit utilization, you should check your previous credit card statements from one year and add the balance of each statement for every month on all your credit cards and divide it by 12 to get the amount of credit you make use of in one month.
When your credit utilization ratio is low, it creates an impression on the lenders that you know how to manage your credit well and don’t use up your credit cards often.
4. Open New Credit Accounts When Necessary
You should not open accounts because you want a better credit mix because it would most likely not boost your credit score.
Piling up unnecessary credit has a way of affecting your credit score negatively by causing you to spend money too much and thereby creating huge debts to be paid.
5. Leave Unused Credit Cards Open
Leaving unused credit cards open is a wise technique in situations whereby they don’t cost you certain yearly charges because when you fail to leave such credit cards open, your credit utilization ratio may increase.
On the other hand, your credit score can reduce when you have fewer accounts while owing the same amount.
6. Reduce Your Number Of Application For New Credit
When you set up a new credit card, your total credit limit may increase but applying for new credit would cause attention on your credit report and this much attention into your credit report has a way of affecting your credit score negatively.
On the other hand, the effect would clear out after some time and could take about 24 months to clear out thereby requiring you to stay patient while you avoid applying for more new credit.
7. Fix All Inaccuracies On Your Credit Report
It is important to review your credit reports at the required agencies or offices to correct any inaccuracies on them if any because the presence of inaccuracies on your credit reports has the ability to reduce your credit scores.
Ensure that all the accounts are correctly entered on your report and also point out any error found to ensure that it is rectified immediately to avoid any future inconveniences it may cause you especially your credit score.
8. Borrow From Friend Or Relative
When you have a problem, instead of using a credit product, that will cost you a higher interest rate, borrow from your relative or friend instead.
9. If you by chance lose your debit card, credit card, or ID card, ensure you quickly contact your financial institution, your creditors, and also all relevant government offices and credit agencies, and notify them of your loss in order to prevent fraud and identity theft.
10. Duration Of Rebuilding Your Credit Score.
In a situation whereby your credit report contains negative information that can reduce your credit score such as debts or delays in paying certain bills, you are expected to make those payments while you wait for your credit score to be improved.
It may take some time to rebuild but it is worth the wait.
Note that the duration of time that it takes to rebuild your credit score is depending on the factors that led to the credit score reduction in the first place.
How To Build Your Credit Scores
In a situation whereby you don’t have a credit score due to a lack of credit experience, your credit wallet would be quite slim and it means that you have little or no credit accounts on your credit reports.
Therefore, to expand the size of your credit wallet you can make an application for a genuine credit card that is secured or you may choose to take a loan to build your credit or several other ways that are approved for building your credit score.
That’s all on how to improve your credit score.
I hope this helps?