2019 is approaching fast, and 2018 is departing with Christmas blessings for all of us. Every year leaves some good and bad experiences but the New Year comes with new opportunities enlightening several ways to earn and progress better. What is your plan to improve your financial condition in 2019? Switching over the job, relocating, enhancing professional credibility etc. are the more commonly known ways for career progress and most of us follow these route as per available opportunity but is there any shortcut way also to feel financial relief soon? Yes, raise your credit score for long-term economic benefits.
What Impacts On Your Credit Score?
Before trying to improve the credit score in the coming year, you must know the key factors that impact your credit score.
- Multiple loan inquiries too frequent: Inviting various proposals is a good practice to get the best deal but to numerous questions made at short intervals delivers adverse impact on the credit score. Inviting the projects at one time from multiple direct lenders doesn’t impact the credit score rating.
- Credit mix: How many kinds of credits, you use, affect the credit score. If you use multiple credit cards in addition to 2-3 loans, your credit score is going to get a noticeable red mark.
- History of credit usage: The way you use the debt also impacts your credit score card. The period of using the credit and the percentage of credit used both affect the credit ranking. The average age of accounts also affects the credit score. The low credit utilisation means you are earning sufficient to manage the credit well. Lenders love to see the usage ratio as 30% or the less.
- Some personal accounts: The names of personal accounts also impact the credit score report. The accounts with right balance support the credit score but the accounts having lower than the average or minimum required balance affect the debt score adversely.
- Negative information: Any negative information about your repayment capability or failures affects the credit score adversely. Any existing information like collection account, bankruptcy, charge-off or settled account is sure to pull down the credit score.
How to Raise/Improve the Credit Score Quickly?
Raising the credit score before borrowing a significant amount pays definitely because the lenders offer lower interest rate for the excellent credit score holding borrower. Also, by having a higher credit score, you always remain in driving seat while finalising the deal because you have more options to get similar or better deal. Here are seven time-tested steps you should follow to raise the credit score:
- Get a credit report copy: Until you know the reason for having the low credit score, you can’t improve it. Sure, you might have an idea about the missed instalment or late repayment, but you may be losing some accounts holding the dues like joint accounts. Your credit report may surprise you by indicating the contributions in your joint statement that you never borrowed. If you find anything inappropriate, ask the credit score referencing agencies to correct the error.
- Pay the balance with priority: If you find some pending bills, pay them with priority. Pay the one that will be removed immediately from a credit report. Next, pay the credit card balance.
- Minimise the utilisation rate: According to Experience experts, the maximum utilisation ration should not exceed to 30 %; therefore, try to minimise the use of credit card even if you have permissible balance.
- Pay all the bills in full: The partial payment of utility bills becomes a habit during the financial crisis buyers it dents the credit score report. Pending of small bills affects the credit score while the big amount bills like medical bills are not reflected on a credit report for 90 days. Setting the automatic payment of small utility bills is an excellent way to raise the credit score.
- Avoid inquiring for the debt unless you need it the most: Just asking for debt affects your certified score indicating that you are in a financial crisis. Every effort for borrowing brings the lender to check your credit score report, and, it reflects on the credit report. Denials are many serious adverse effects that you should always avoid. If you see a lender accessing the credit report without your permission, you may request to remove that ‘BAD’ entry.
- Don’t open a new account: If you opening new accounts very frequently without any specific purpose, you harm the debt score. Avoid this practice because the creditors become suspicious.
- Increase the Available Credit: Maintaining a good gap between the maximum limit and the dues helps to improve credit score. If you see it less, request the companies to increase your usage limit.
Paying on time is a good habit of dissolving many problems that become a big barrier in borrowing in future. Although bad credit personal loans are widely available in any country at direct loan stores, a healthy credit score report may help you save considerably by getting the better deal.