Having a good credit score comes with a lot of freedom, which is evident since it determines your ability to make purchases in the future. With good credit, you will also find it easy to get lower rates on loans and credit cards, which may lower your cost of living. The fact that having a poor credit score limits you financially.Getting loans and having reasonable rates on your mortgage might be harder to achieve, making your life a struggle.
Improving your credit score might be seen by many as a tough issue to tackle, but to the surprise of many, improving your credit score may be fast and straightforward. Here are some ways you can use to improve your credit score quickly.
Paying Your Bills on Time
Missing payments significantly affects your score, though it is considered okay if you have only missed one or two payments, paying your bills consistently and on time after missing payments will result in the improvement of your score.
Use Different Types of Credit
If you use your loans and other types of credit from credit unions and instalment loans in purchasing and maintaining more than one credit card, it shows that you can manage to pay different kinds of credit. You will be considered as a good borrower by reporting agencies if you pay these loans on time, which will lead your credit score to increase.
Reducing How Much You Owe
Reducing the amount that you owe is very practical in increasing your credit score. In fact,the amount of money you owe determines 30% of your credit score. If you commit yourself to reducing your debt and paying your bills on time, you are going to increase your credit score. By simply decreasing the amount you owe and paying your bills on time twice every month, you can control 65% of your total score.
Becoming an Authorized User
You should consider finding someone with a long record of managing their finances well that has a higher credit limit and is willing to add you to his or her card as an authorized user. Doing so will result in giving you a longer credit history, which will assist your credit utilization, thus improving your credit score significantly. For more information, see page.
Keep Credit Cards Open
Closing your credit card makes you lose that cards’ credit limit when your credit utilization is calculated. To prevent your card from being closed, you should occasionally use your card, which will prevent a lower score on your credit profile.
Increasing Your Credit Limit
If you do not change your spending habits when you increase your credit limit, you lower your overall credit utilization instantly. Reducing your credit utilization leads to the improvement of your credit profile.
Clean Up Your Credit Report
Statistics show that inaccuracy in consumer credit reports may cause five to fifty credit points. This shows the importance of checking for errors in your credit report. Removing these errors from your credit history will lead your credit score to improve.Read Also: The 7 Natural Wonders of The World
No matter how disappointing your credit score looks, there is always a solution to improveit. You should spend according to your financial ability and remember to pay all of your bills on time since it is easier to maintain a good credit score than to fix one.