Your credit score can affect your life more than you think.
Having a high score can make all of the difference in the world when it comes to getting approved for a personal loan, a credit card, or another line of credit. Not to mention, if your score is on the higher side of the spectrum, you’ll enjoy putting less money down for cars, real estate, etc. Of course, all may not be lost if your score decreases or if your credit score can currently use some work.
For instance, you can get an auto loan for bad credit to obtain a new vehicle. However, the interest rate of that loan will likely be on the high side, perhaps even as much as 19 to 25 percent or more. You’ll end up paying back much more than you borrowed in the end.
So if your credit score has dipped over the years, now could be the perfect time to act and start improving your credit score. Then, once your score hits that exceptional range of 800 to 850, you won’t face the hardships that consumers with bad credit face. Below are some tips to help you accomplish the feat.
Pay the Minimum Balance Due on Time
When repaying anything or paying bills, it is a best practice to pay the minimum balance due on time every month or whenever the payment is due. Better yet, pay over the minimum amount. You may want to look into this before doing so with a loan, as some companies penalise creditors for paying early. But by paying the bare minimum will at least be enough to improve your credit score over time.
Research shows that lenders use Experian, Equifax, TransUnion to determine credit eligibility. One of the factors that impacts this score the most is payment history. Hence, make it a point to get a handle on bill payments, and your credit score will soon begin to climb.
30 Percent Credit Utilisation
Resources reveal that people should try for 30 percent credit utilisation. That number isn’t a rule, but it is what financial experts recommend. However, getting that number even lower could be better for your credit score.
Avoid Opening Too Many New Credit Lines at Once
It can be tempting to open new lines of credit at every chance you get. However, it is in your best interest to use new credit sparingly and avoid opening too many new accounts close together. Obviously, this will increase your credit limit as a whole, but it can also negatively impact your credit score. This is yet another way to improve your credit score, or at the very least, prevent it from decreasing.
Be Wary of Old Debts
Old debts are often considered “Statute-barred,” six years after the default notice expires. That means you legally do not have to pay off the remaining balance of the debt. Debt agencies may still try to contact people trying to recover the money, but according to Citizens Advice getting back in touch with the debt agency could make it look like you agree that you still owe the money. This can reset the time limit, so the statute barred is not in place again until another six years have passed.
Sign Up for a Credit Boost Service
Are you looking for a way to increase your credit score instantly? A credit boost service like Experian Boost™ can help with that. The benefit gets you credit for Netflix®, Disney+™, phone and utility bills. In as little as three easy steps, a person can give their score the jolt it needs.
To use the service, first, you must connect your bank accounts used to pay bills to the service. Then, you pick and verify the positive payment history to add to their Experian credit file. Finally, the last step is to submit everything and learn about your boost instantly.
Hire Someone To Repair Your Credit
Even if you don’t feel like going through the hassle of taking a do-it-yourself approach to increasing your credit score, there might still be a solution. You can get in touch with a local or online company that repairs credit. Obtaining the repair service will improve your credit score and make your profile more attractive to lenders. So, if that sounds appealing, what are you waiting for? Pay a professional to help get your credit score where you want it to be.
Some Final Thoughts
Raising your credit score doesn’t have to be challenging. However, it can sometimes be that way because people don’t know what to do to increase their numbers. Thankfully, that stops today for you. Use these tips to improve your credit score and make your life easier, financially speaking. Then, you’ll be able to get the loans and other lines of credit you want effortlessly.