7 Steps To Improve Your Credit
There are many benefits why good credit is advantageous, not only for the purpose of acquiring another loan but getting a job and establishing a good reputation. To help you get good credit, below are good and effective ways to do so.
7 Steps For Winnipeggers To Improve Their Credit
Below are steps you can consider to see improvement on your credit:
1. Keep track of your bills and pay them on time
When a lender asks for your credit report, what they will check is the consistency of paying your bills on time. They do this because they consider your past payment behavior as an indication of your future payment behaviour.
Paying all your bills, not limited to just your credit cards, on time as specified on the agreed payment dates may positively influence your credit report. Settling less than agreed and later than the due date may provide lenders with a bad impression.
There are instances though, that even how hard you try to be current, your financial capability cannot adhere to your payables. If this happens, it is recommended that you try your best to make past due current as soon as possible.
Tip: Set a reminder on your phone of all bills you need to pay, 2 days prior due date.
2. Make sure your credit card, including other revolving credit, balance is low and if possible pay off your debt
Keeping your utilization ratio low is necessary. To compute for your utilization ratio, get the percentage of your usual charge to your credit limit, like if you usually charge $300 every month and your total credit limit to all your cards is $1000, utilization ratio is 30%.
Get the average if you are looking for a month worth of credit card utilization.
3. New credit account/s will not help you
Some think that applying new credit can help them improve credit status, as it will be mixed to bad ones. Unfortunately, too may credit accounts, new and old, may send an impression that the borrower have too many temptations borrowing money that they may not afford to pay soon.
4. Do not close your credit cards even unused
As long as it is not costing you fees, keep unused credit accounts open. The reason behind is if you close unused credits, your credit utilization may increase, since the money you owe did not change but the number of your available credit accounts does.
5. Do not apply and get too many credit cards that may result to multiple inquiries
Yes, having too many credit cards open can increase your credit limit, but unfortunately, if you apply for too many credits, it may create hard inquiry to the credit report. This may fade later, but two years is too long for lenders to see this mark.
6. If there are inaccuracies on credit reports, file a dispute immediately
Make sure that all information on your credit accounts are correct, if there are inaccuracies make sure to report it immediately. Some credit companies do not take action immediately, one, they have too many customers to look after, two, credit posting and statement printing are system generated, and three, they just ignore and wait until you call them and file a complaint.
The moment you find out there is an error on your credit report call the lender immediately.
7. Do not borrow money if you do not need it anyway
Some borrow money just for the purpose of borrowing. They take advantage of the credit offered to them, even when there is no need, they will take it. Loan or credit is not a privilege, unless needed. In the end, the money you took on a loan will be spent to something useless. And eventually you will have to payback the money anyhow. So do not indulge yourself in such practices.
The above mentioned are some tips that can help you improve your credit score. You should always make it a point to pay your bills on time as far as possible. Use your credit limit wisely if you want to maintain a good credit score. It has many benefits. Not only it helps you getting loans easily when in need but there are several other benefits as well. Like you can expect low interest rates on the loans you have taken if you have good credit score.