How to Improve Your Credit Score
With the summer months just around the corner, a large number of people are constantly hitting the gym in a bid to work on their summer bodies. Those with first-hand experience in the sweats and on treadmills know that it is very difficult to sculpt those abs yet very easy to lose them.
In the same way, it is quite difficult to raise a great credit score, harder still to maintain it yet very easy to send it down the drain. A great credit score will enable you to easily get more funding to acquire some properties because the lender is sure of your ability to pay back.
Keeping in mind that it does not happen overnight, here is a few ways in which you can get a great credit score and maintain it.
Get rid of credit card balances
Many people have a number of credit cards that they use to pay for an assortment of things. With these numerous credit cards, you are bound to have balances on each of them, however small. These small balances on the numerous cards can greatly affect your credit score.
It is, therefore, advisable that you settle all these balances and stick to a fewer number of credit cards for your everyday purchases and expenses. This way your credit score is improved because when the relevant authorities check, you only have a couple of cards with balances while the rest have been settled.
Don’t exceed your credit limit
Each credit card that has been handed to you has a specific maximum amount of credit on it that you should not exceed. It is very important not to max out a card because not only may it get difficult for you to pay back such a large amount, it might also show irresponsibility with regards to handling personal finances.
This reflects badly on your credit score. To keep this in check, it is advisable to have your credit card debt below 10 per cent of your monthly income. At this low figure, you can be able to pay off this monthly debt and thus keep your credit score up.
Old debt IS good
Many people are in a hurry to remove debt from their credit report because they think that it reflects badly on them. On the contrary, this old debt that you have paid off is very good as regards your credit score.
Your credit score is, in simple terms, your ability to pay money that you owe. Leaving the old debt that you successfully paid on your credit report for as long as possible only works positively for you as regards your credit score.
Pay your bills… and do so on time
This is the main way to keep your credit score high. Simply pay what you owe on time. You should always pay your bills, be it monthly or otherwise, on the set schedule that you have with your lender.
It is wise to have automated reminders so that you can always send your payments on time. On your credit report, this reflects as being able to pay what you owe on time and as such you get a get a good credit score.
If you happen to fall behind on payment, you should catch up and continue to pay on time. This will raise the score. If you cannot make a payment on time, it is advisable to get in touch with your lender so that you can alert them to this new development. Some lenders are flexible enough to introduce you to a new payment plan that you find more manageable.