Credit woes? Here are 10 tips to improve credit score

Are you looking for a quick fix to your depleting credit scores? Don’t worry as you are on the right page that will help you sail through your difficult times.

Take a look at these 10 tips to improve credit score and relax.

Scan credit reports: Developing this habit will let you know if you have been delaying the payments or if any misinformation has cropped up or there has been any fraudulent activity. This habit will help you fix your credit scores by reporting it to the credit bureaus and getting it rectified.  

Opt for credit repair agencies: These can be like your guardian angles if you happen to land up with the right company. These companies take over the responsibility of dealing with challenging items such as reviewing your credit reports, dealing with collection agencies, lenders and so on.

Prioritize debts:  Adopting a well-planned strategy will help you become debt-free soon. Financial experts have advised concentrating on paying off the smaller debts first and then moving on larger ones. You could also try getting rid of those debts that have a higher rate of interest.

Find a co-signer: Having a co-signer guarantee your loan ups your credibility. This is because the cosigner would be committing to pay the balance in case you are unable to repay the amount. Having a cosigner potentially lowers your rate of interest, reduces the amount of Equated Monthly Installments (EMIs), and keeps your credit scores shining. 

Avoid debt settlements: Also known as credit score settlement and account settlement, this provision could be tempting for those who want to get the lenders off their back. But the lenders report it to the credit bureaus and it stays on your credit report for several years. You could try talking with the lenders to restructure your installments as per your convenience to keep your scores soaring high.

Avoid hard hits: When you apply for new credit it incurs a hard inquiry which hurts your scores. So, to keep your scores intact, apply for a loan only when you need it and avoid too many applications frequently.

Pay twice a month: For those struggling with finances, they must try to pay their credit bills twice a month to keep the balance to a minimal. This saves you from paying high interest on the balance and ensures the credit utilisation limit is never exceeded.   

Never discard old credit history: Your credit history length is a reflection of how you have managed your reputation. It is proof that you have paid your bills on time each month and as a result of it, there has been an improvement in the credit scores year after year.  

Have a healthy credit mix: A good credit mix having a diverse financial portfolio. It could have a combination of secured loans such as home or automobile loans and unsecured loans like credit cards and personal loans. Maintaining a mix of credit displays an overall greater sense of responsibility towards your finances.

Use reward points: These are like icing on the cake. Redeeming reward points allows you to make purchases or avail discounts and save your money. This eventually helps you improve your credit scores.

Conclusion

So, if you keep following these 10 tips to improve credit score, we assure you a sparkling and secure financial future.

Never let a poor credit history rating embarrass you

Did you ever face embarrassment and dejection when your credit application is rejected on account of poor credit history rating? Well then you need to learn a bit more on why it is important to have good ratings.

So, let’s start from the basics. First of all, let us understand that the ratings are awarded by certified credit rating agencies to companies to demonstrate a history of responsible borrowing. This means that when companies apply for loan to expand their business or to meet their expenditures, the prospective lenders take a look at it to assess the borrower’s creditworthiness. They use it as a tool to understand whether the applicant will be able to repay the borrowed amount or will falter.

The scale is an amalgamation of aphla-symbols that ranges from A++ to D.  And when the ratings are high, the lenders are more than happy to extend the loan and the amount gets disbursed within no time into your account and depleting ratings can get the loan application rejected.

So make sure your company has a history of good credit ratings and ranks high on the rating scale. Take a thorough look on the tips that will tell you how you can have a rocking credit history rating.

Make timely payments: It is a principal rule to pay off your debts first. This is because any late payments ranks on your credit rating report and could reflect in the history for years depending upon the intensity of the lapses you make. Simply put, every missed payment will create a negative impact to your credit score.

Tip: Try prioritising your credit and pay off the smaller loans and move on to the next ones.

Maintain credit utilisation ratio: Overspending could ruin your credit utilisation ratio and create a situation of possible default. This could eventually lead to a reduction in your credit score.

Tip: Keep the debt utilisation ratio well under 35%. Doing so will help you pay off the loan without any trouble.

Avoid any hard inquiries: Every request you make for a new credit gets registered as a hard inquiry and frequent hard inquiries tag you as a person who is desperate for money and probably is unable to handle the finances. This goes against your reputation.

Tip: Opt for loan only when you need it the most. Otherwise making constant inquiries can hamper your credit history rating.

Never opt for debt settlement: When you approach your lenders to agree for debt settlement, it means that you will have to pay less than the actual amount you owe. This will get the lenders off your back, but in reality it would be reported to the credit bureau and the same will get reflected in your credit report. This blot would stay on the report for years.

Tip: Try proposing the lenders to restructure the loan repayment as per your convenience. 

Conclusion

So, if you follow these steps and keep your credit history rocking and in shape, you will always have an upper hand while dealing with lenders.

Need a gateway to happy future? Check your credit score now

There are a lot of people who just flip aside the credit report when they receive it from the credit bureaus without analysing their scores. Most people are not worried if the scores are good or bad or if there are aspects that need to be worked upon.

But we warn you that people who practice this often regret it in the days to come when they really need money and apply for loans. So, believe us when we tell you that it is necessary to keep an eye on your score on a regular basis as it will help you have a great financial future. Good scores can literally get the world at your feet as it will convey a better credit look about you to your lenders.

So, here are a few more reasons why you should check your credit score and how they become a gateway to help you live a better life.  

Helps negotiate loan conditions better: One of the major benefits of good credit scores is that it enables you to get an upper hand to negotiate with lenders in terms of loan interest rate, tenure and so on. This means that if the credit scores are brimming and shining, and you are aware of it, you can talk it out with the lender to lower the interest rate and can get a convenient term period, which means that the less money you pay in the form of interest. The faster you'll pay off the debt and the more money you have for other expenses. Also, if the scores are good, the processing and disbursal of all types of loans gets completed within no time.

Better knowledge of your finances: If you checkyour credit score on a regular basis, it will help you get a better understanding of your monetary status and you also get to know the areas where you need to pull yourself up. It helps you understand if you have been in impulsive investor or are overusing the available credit limit or need to pay your bills before the billing cycle.  

Reduce monetary disasters: The exercise of thoroughly scanning your scores reduces the possibilities of fraudulent activities, discrepancies, incorrect entries, and more. Also, it helps you spot wrong information that has been accidently put on your report on account of mistaken identities or identical names.

Conclusion

It is important to understand that many people skip reviewing their credit scores and they could be doing it for various reasons. They could do it either because they are too busy with their daily chores, or probably they do not know how to read the report or they are yet to realise the importance of going through it minutely. But whatever the reason be, it is a huge mistake they make which reflects in the form of poor scores.

So, if you too are not in the habit to check your credit score, then develop it fast as it is an important step to a happy financial future.