If you have issues with your credit score and need to get this boosted – unfortunately it won’t happen straight away. Credit scores don’t simply take into account your financial position right now – but years of past behaviour. If you have recently looked at your credit report and are keen to get your score up where it should be, we have listed some steps below that could help you on a better path.
Check your Credit Card Balances
One of the big considerations when it comes to your credit score is how much credit you have as opposed to how much you actually use. If the percentage of this is small (ideally 30% or lower), the better the impact this will have on your credit score.
If you have more than one credit card that has outstanding balances, even if they are small amounts – it’s a good idea to get those paid off. It’s beneficial to your credit score that there aren’t multiple cards that have balances no matter how little the amount is. This can display erratic spending behaviour.
Get a Personal Loan
If you simply don’t have the funds to pay off your outstanding credit card balances, there is always the option to get a personal loan. There are loans for bad credit available from many providers to get you back on your feet, and to allow you to make one hassle-free monthly payment. This makes managing your finances easier. It also gives you an end date as to when your debt will be fully paid off.
They can also make the process nice and easy for you. You can apply online for a bad credit loan and get a speedy response. You also don’t need to worry about the quote affecting your credit score in some cases which is an added bonus.
Keep Old Debt on your Report
Most people think that if there is old debt on their report that this is a very bad thing, and as soon as they pay something off are in a massive rush to get it removed from their report. If there is something negative, then most of these will disappear eventually (after 7 years) but getting rid of accounts of debt simply due to them being paid won’t have a positive effect on your report.
If you have what is considered to be “good debt” this can impact your credit score positively. This is debt that you have handled and paid off as agreed. It shows that you have a good and reliable payment record. If you have done something well, keep it on there.
Make Use of your Calendar
If there is something that you need credit for such as purchasing a new home, car or wedding – try and do all of your rate research in a short period of time. When you apply for credit card credit, it can cause dips in your score which will last a year. If there are lots of applications made at different periods of time, it suggests that you want to use more credit which won’t be a positive indicator, in terms of calculating your sore.
Pay your Bills in a Timely Fashion
This may seem obvious, but it’s incredibly important. If you are going to make a large purchase, you could be inclined to delay paying bills to earn the level of cash you need at that time. The key to getting a good credit score is in fact to be boring when it comes to making payments. They want you to pay your bills on time every month. If you aren’t good at paying your bills it will damage your credit report. This can include things that you may not even have thought of such as incurring a late fee on a library book. If the original creditor doesn’t receive the necessary payment – this could then be deferred to a collections agency.
Don’t Become Obsessive
If you know you will need credit, then of course you should pay attention to your credit score. In the meantime – as long as you are using your credit as you should be and paying your bills on time – this alone will be in your favour. If you are looking to buy a new home or car, or something of high value – have a look at your score a few months prior. It may not be the exact same score that they use, however it will give you a good idea of how well you are doing in terms of credit. Credit reports also offer suggestions as to how you can improve your score, so you can do regular checks on them.