Have you checked your credit score lately? If not, you need to check it as soon as possible. This is because a credit score is one of the vital measures of your financial health. It shows creditors how reliable you are as a borrower in the management and repayment of credit products.
When you have a good score, you will have an easier time getting your loan and credit card application approved. Also, an impressive credit rating will enable you to get loans at the lowest interest rates offered and enjoy many other benefits.
Here are some of the ways through which you can improve your credit score:
Pay Your Bills and Loans on Time
Among the key things that determine your credit score is your payment history. You stand to get an excellent credit score if you have a long history of meeting your obligations on time, especially loans. And to enjoy this benefit, ensure you are not late in paying your loans or credit card balances by more than 29 days. This is because lenders can share with credit reference bureaus payments that are at least 30 days late, which can negatively impact your credit score.
You can avoid getting late with payments by setting automatic payments for the various obligations you should pay every month. The amounts are deducted and remitted to the lenders without fail. Also, if you are facing problems with cash flow, talk with your lender to come up with a hardship plan to help you get through.
Review Your Credit Report Regularly
You need to request your credit report and comb through it to check for any mistakes, e.g., errors in personal details like names, addresses, or wrong entries or omitted entries. Because all those things can affect your score, you need to launch complaints about them so the credit bureau can correct them. If you also find any payment you have been paying not included in the report, report that so they can add it because it can boost your score.
Keep Your Credit Card Accounts Open
Sometimes you may think closing a credit card account is a good idea to avoid piling up debts. However, if you are looking to improve your score, it can hurt your score. This happens for two main reasons: firstly, you lose that credit card’s history that was contributing to your score. Secondly, you reduce your credit limit when the overall credit utilization is computed, resulting in a lower score. So, do not close any credit card accounts when working on building your credit rating.