You know that it is important to improve your credit score, right?
Credit scores are a way for lenders to determine how much of a safe bet you are when it comes to borrowing. They’re a crucial factor if you want to successfully obtain credit – whether that’s a mobile phone contract or credit card, or even a debt consolidation loan or mortgage. No matter the amount in question, a lender will want to examine your credit history to see whether you fit their lending criteria.
As such, it’s important to keep an eye on the information held on you by the credit agencies that lenders use. In addition to showing you whether you stand in good stead for that next big purchase, your credit report can also alert you to modern-day security worries such as identity theft.
Should you be concerned that your credit score isn’t as good as you’d like, these five simple steps can help you get it back on track:
Check and Double-Check
Rather than just looking at your scores, go through the report with a fine-toothed comb, to make sure that it’s accurate. If there are any missing or late payments showing, cross reference them with your records as mistakes can happen.
Remove Inaccuracies
If you do find any inaccuracies in your report, investigate. Is it a mistake or could there be something more sinister such as identifying fraud to blame? Contact any companies, lenders or credit agencies that you don’t recognise on the report and get more information about the transactions. If they shouldn’t be on your credit file, then you can take measures to get them removed.
Sever Toxic Financial Ties
Our past relationships, and financial relationships, can link into our own credit file so make sure that you are not financially connected to anyone with bad credit. Look closely at members of your household and how you are tied to them financially. Even sharing bills with a housemate could have a negative effect, so try to keep your finances as separate as possible in order to maintain maximum control over your own credit history.
Deal with Debts
If you do have outstanding debts, don’t bury your head in the sand – deal with them. The National Debtline offers free and confidential support for anyone with money worries or debt difficulties.
Improve Your Credit Score by Getting ‘Good’ Credit
It’s possible to help a credit rating with ‘good’ credit, which means taking out a credit card or some form of credit but being sure to make consistent and timely payments. This helps build a positive credit history.
Good or bad, your credit scores shouldn’t be ignored. Make sure that you’re aware of the information held on file about you, and take simple steps to get your credit score as high as possible for easier lending.
These are pretty good guidelines 🙂 Keeping your credit score in good standing is as important as saving money because it’s used to negotiate the interest rate, or cost of borrowing. One thing that I sometimes have trouble with is keeping my credit utilization low. If that gets too high, it can also hurt my credit rating 😛
Yes totally agree with this, makes sense..
I have always had a good credit score because I paid attention to paying my bills on time. I never took on debt without some thought of how I was going to repay it. Acting responsibly financially usually takes care of your credit score all by itself. In addition, you have to check your credit periodically for inaccuracies.
Starting early also helps, as long as you can steer clear of the common pitfalls of first time credit users.
I raised my credit score by about 30 points in a month by paying off my two credit cards below 50%. That will probably be the quickest way to do it is by paying off your balances. There are certain thresholds that once you get under will give you a big boost, 50% being one.
I completely agree with this advice. It makes a huge difference.
Your point about getting ‘good credit’ is of course a valid one but for those who have a poor credit score the best credit deals are not available to them.
So it’s important for those in this category to understand that a bad credit, credit card is also a great way, if used properly, to rebuild a credit score.
Having a good credit score is a result of being responsible in payments and also managing your credit wisely. If you want to improve your credit score, you might want to do those things.