9 Simple ways to improve your credit score
Good credit history is important when you want to buy a house,
start a business or take any type of loan. Today people are more
and more dependent on credit to invest in or to buy anything. Even
businesses now extend their services or products to customers based
on their credit history, as they are concerned about their ability
to repay. However, not many are able to maintain a good credit
score. According to FICO, almost 60% of people have a credit score
of less than 750. If you are one of those with a low credit score
and want to improve it, here are some positive measures you can
adopt to better your credit rating.
1. Dont Aim Big, Start Small If you are applying for your first
loan, dont ask for a large amount because there is a high
probability it will be refused. Lenders are often ready to take
risks with smaller amounts and would like to see how responsible
you are with your repayments. And when you make the payments on
time, that gets you a positive score.
2. No Credit Card? Apply for a Secured Credit Card If you dont
have a credit card, you can apply for a secured credit card. A
deposit into your savings account serves as collateral on the
things you buy with the secured credit card. After a period of
time, if your repayment record is good, banks will consider issuing
a regular card with a higher credit limit.
3. Gasoline or Department Store Credit Card - If you are a first
time card holder or want to re-establish credit, these cards can be
very useful and are easy to get. Although they offer lower credit
limits, by using this card and paying on time each month, you can
build your credit score slowly.
4. Always Start with One Card - Dont accumulate too many cards.
The more cards you have, the more you'll end up using them. Learn
to be responsible before obtaining multiple cards. This can save
you a lot of trouble by preventing debt accumulation.
5. Keep an Eye on your Credit Report It is important to check
your credit report regularly, especially before applying for a big
loan. The information on your credit report is usually accurate,
but sometimes mistakes or even fraudulent activities can occur. It
is in your best interest to correct these issues promptly.
6. Avoid Changing Jobs Frequently Lenders generally like
applicants with job stability as it reflects their likelihood of
paying regularly. This does not mean you cannot switch jobs just
for the sake of your credit score, but you should be aware of the
fact that this does play a role in credit loan approvals.
7. Decrease Your Debt Steadily and Consistently - The more you
pay, the smaller your debt becomes. Draw up a good debt management
plan and strictly adhere to it. Do not use your credit cards while
paying off your debts or you will never be able to tackle your
debts effectively.
8. Pay on Time - Pay all of your bills on time. Pay at least the
minimum balance if you cant pay fully. This is one sure way to
build and maintain a decent credit score.
9. Credit Card Debt Counselor If you need help with your debt
management, contact a credit card debt counselor. A credit card
debt counselor is a debt management expert who can help you handle
your debts effectively. Improving your credit score takes time. It
is not something that can be achieved overnight, but should be
looked upon as a long-term goal. Use the tips suggested above to
achieve this long-term goal.
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