Top Tips for Boosting Your Credit Rating
As we covered in our last post, your credit rating is extremely important. Not only does it determine whether or not lenders will offer you financing, but it will also affect the interest rates you are given on loans. For that reason, you’ll want to do all you can to keep your credit score as high as possible. If you’re in serious money trouble, then you might need some expert help to remedy the situation. However, even if your credit score is already relatively high, there are still steps you can take to boost it even further. Whatever your personal situation, try the steps below- you’ll soon notice a big difference!
Keep Up with Loan Repayments
The simplest way to build your credit score is to ensure you’re always on top of any repayments you have to make. Credit ratings aren’t just meaningless numbers- at the end of the day, they are all about telling lenders whether or not you are a responsible borrower. If you can prove that you aren’t borrowing beyond your means, and always make repayments on time, then naturally you will be a better prospect for other lenders, too. What’s more, if you have a strong repayment history already, then a single missed payment won’t have as much of an impact on your score as it would otherwise. Building your credit score in this manner takes time, but it’s the most effective way of maintaining it in the long term.
Sign Up to the Electoral Register
If you haven’t already done so, signing up to the electoral register is a great way to instantly bump your credit score up a few points. Why? Essentially, it’s all about making banks and other lenders feel reassured that you won’t run away from your debts. Giving them an address where they can contact you is one thing, but actually proving that you are tied down to that property takes things one step further. It’s a simple step, but one well worth taking to boost your credit rating.
Look Into Credit-Building Cards
As we already mentioned, keeping up with existing loan repayments is a great place to start. However, if you want to get even greater effects, then you might want to consider taking out a special credit-building card. These tend to come with higher interest rates than standard credit cards, but that’s really the whole point of them. By actively demonstrating that you can keep up with such payments, you’re showing lenders that you aren’t going to pose a risk to them. What’s more, if you pay off your credit card bill early enough, then you can often avoid the high interest rates entirely. Just make sure you do your research first, and avoid going over around 40% of your credit limit, and you should find that this method gets results relatively quickly.
Close Any Credit Accounts You Don’t Use
Many people have credit accounts that they opened years ago, but no longer use- in fact, you may well have forgotten about them entirely. However, in our data-driven world, nothing is ever gone entirely. These accounts will still show up when credit checks are carried out and will usually have a negative impact on your rating. That’s because they suggest you are using up more credit than you actually are- the fact that you don’t use the account anymore doesn’t matter. Rather than letting these accounts lie open and never using them, it’s better to just close them right away, and enjoy the improved credit rating you’ll gain as a result.
Clear any old debts
If you are struggling to keep up to date with your credit/payemnt on loans, overdrafts etc, you can get friendly debt advice here, they can help you to improve your debt score and boost your credit rating.
How to Start Boosting Your Credit Score
In our previous posts, we’ve explained just what a credit score is, and given you some useful tips on how to bump up your credit score a few points. However, while these pointers will certainly come in handy for those of you who can manage your money effectively, other readers might find themselves in more desperate circumstances. If you can’t afford to keep up with yoru debt repayments, then your credit rating will continue to fall until you take action. If you reach the point where bankruptcy or sequestration is your only option, then this will have an even greater impact on your credit score- and once you reach rock bottom, it can be difficult to see a way out of your situation.
Even if you have got into serious financial difficulties, though, there are options available to you which will help you see the light at the end of the tunnel. Being in debt can make you feel like the whole world is against you, but if you seek professional help from a qualified financial advisor, they can work with you to manage your debts, and figure out the best way forward based on your unique circumstances. As time goes on, your credit score will start to rise, and with enough time and effort, even the most debt-ridden individuals can restore their rating to a healthy level.
Professionals Can Help With Your Credit Score- But They Can’t Do Everything For You
It’s important to note that you can’t just pay someone to fix your credit score, and then sit back and do nothing yourself. While they will be able to provide expert insight into your credit report, and give you some professional guidance, you’ll still have to put in the hard work yourself. After all, it’s your credit score hanging in the balance- so it’s only fair that you actively make an effort to put things right. That being said, a financial advisor will be able to point you towards solutions that you may not have known existed, and ensure you don’t slip back into bad habits.
Debt Management Can Help You Stay On Top of Things
If you have a lot of debts to pay, then debt management is usually the best option. Reorganizing all your existing debts into a single, lower repayment, debt management solutions require professional assistance, but are extremely beneficial. Not only do they take some of the pressure off when it comes to your existing debts, but by putting your repayments within your budget, you won’t end up doing any more damage to your credit score by missing them. As we mentioned in a previous post, the best way to restore your credit score is by keeping up with any loan repayments you have- and debt management lets you do just that!
It’s amazing how few people out there even know such debt management solutions exist. They assume that their only option in the face of unmanageable debt is to declare themselves bankrupt, which has a devastating impact on their credit score and could prevent them from accessing financing options in the future. On the other hand, by calling in the professionals to help you tackle your debts, it’s often possible to avoid bankruptcy altogether. Don’t feel like there’s no point in trying to fix your credit score. No matter what your circumstances, there are still steps you can take to put yourself back on the road to a good, solid credit score- so it’s well worth your time to seek out someone who can help you decide which of these steps are best for you.
Clearing Up Credit Scores
If you’ve ever taken out a loan or a mortgage, then you will almost certainly have heard the term “credit score” thrown around. However, while most people have a vague idea of what this means- they know it’s something to do with your credit history- few bother to learn much more than the basics. You should, though, since your credit score can have a huge impact on your life for just a little number. It determines the interest rates you’ll pay on loans, and it could make all the difference between getting a mortgage and being declined one. It’s therefore well worth learning more about how credit scores work- and luckily for you, we’re here to help! Read on, and all will be explained.
Just What is a Credit Score?
Your credit score essential boils down to a three-digit number. But while the end result is pretty straightforward, a lot of different factors go into deciding your credit score. In effect, it’s the end result of your whole life’s financial history, so every loan, overdraft, and unpaid bill will have an effect on your score. Even credit score searches when you apply for a loan can have a negative impact, so it is definitely something you should bear in mind. All of this information is then put into a complicated mathematical system, which condenses the data into an easily understandable figure. Lenders can look at your credit score an instantly make a decision about how much of a risk you pose- and whether or not they want to take on that risk.
Lenders don’t want the hassle of having to follow up a borrower who is late on their repayments, or worse still, take action to recover their money. Even if they manage to get back every penny they are owed, the whole process is still time-consuming, and something they would rather avoid. If your credit score is high, then they will see you are someone who is careful with their money, and therefore unlikely to fall behind with their payments. Not only are people with high credit scores more likely to be accepted for financing, but they will also typically be given lower interest rates, too.
How Can I Boost My Credit Score?
Since your credit score is so complex, it’s relatively easy for mistakes to be made which can have a pretty serious impact on your score. For that reason, it’s a smart idea to regularly review your credit report to make sure all the information is accurate. If you notice anything that’s not right, then be sure to report it to whoever made the mistake, so that it can be fixed as soon as possible. It’s not enough to just know your credit rating, though. Unless you have a perfect score, there will always be things you can do to boost your credit rating. A financial planner will be able to help you do this, and also provide useful advice on how you can best put your credit score to good use. Even if you are in a lot of debt, there are still steps you can take to boost your credit rating and get out of your current situation- so be sure to speak to the experts and get the ball rolling as soon as possible.