Keeping a healthy and clean credit record is more important than ever nowadays. Your credit score is what potential loan, mortgage, and finance companies use to decide whether you are eligible and decides what rates you will be able to get. Unfortunately for many citizens, a lot of us aren’t taught about the importance of our credit score until it is too late.
The first step I would advise you to take if you are clueless when it comes to your credit file is to sign up to one of the reputable credit score companies. Make sure you do your research as some are more trustworthy than others, you only need to look at the recent Experian data breach settlement to see that.
After you have found out your credit score, here are some tips to use to improve it.
Correct any wrong information in your file
When you have opened an account with a credit file company, spend some time reviewing the information they have on you. It is surprising how often a person’s credit file can be negatively impacted by information that is wrong.
If you find any discrepancies, make sure you contact them immediately so they can sort it out.
Avoid opening lots of credit accounts
A massive influence on your credit score is the age of your accounts and the number of credit accounts you have. Accounts that are older will be looked upon much more favorably then new accounts. Also, with every application for credit, a hard check will be recorded against your name. A large amount of hard checks against your name can have a negative impact on your score, so try to avoid applying for lots of credit in a short period.
Reduce your credit
A strong factor that the credit companies use to calculate your credit score is the amount of potential credit that you have. Reducing your credit card limits and paying off as much of your outstanding credit as possible are great ways to increase your credit score. A good rule to follow is that you only use around 30% of your total credit allowance, this shows that you are a responsible borrower.
Pay your bills digitally
Lots of people still pay their bills by posting checks. Unfortunately, when you pay your bills this way, there is a risk your payment will not be processed on the day that you want. If a check goes missing or there is a delay at the post office, you may be penalized for missing a payment. Set up direct debits or pay your bills digitally to counter this, so your payments are always made on time.
There you are, if you are trying to improve a bad credit score or just want to maintain a positive one, following these tips should give you a fighting chance of doing so. Credit score is becoming more and more important in the modern age. Being smart with your credit applications, and the way you deal with your credit is extremely important.
Thanks for reading.