We all know how our credit score can have a significant impact on our financial decisions. May it be the need for a loan, a financial obligation or simply the desire to purchase something that your income alone can’t cover – they all are connected to your credit situation. Let’s talk about of the easiest ways you can work on reaching a good credit score!
- Verify your Credit Rating History
First of all, you need to access your Credit Rating history. Why is this important? Because you need to know if all the information is accurate or updated. You might find out that a minor error can cause a major … headache. For example, a small sum of money, like a 30 USD debt – the longer the bill goes unpaid, the more it can affect your credit trustworthiness. Keeping track of your finances and accessing your Credit Rating History at least once a year is an apparently meaningless step, but it can make a huge difference.
- Keep your financial life organized
Pay your bills on time! Once you are late with your payments, every activity will be reported to the credit bureaus and needless to say, your credit score will take the hit! For example, if you move to a new home, have your name removed from all the bills and make sure the final bills sent to your old home address will be paid on time as well. Just grab a tiny notebook and write down every aspect of your financial life, this way you can see what the big picture is made of.
- Try to “communicate” with the Credit Bureaus through your actions
They are the ones who notice everything you do! If you need a loan, make sure you opt for one which doesn’t affect your Credit Score. For instance, installment loans are a great choice, because they are very flexible and you can design the repayment schedule according to your needs and possibilities. If you pay back the principal on any loan before it is due, credit bureaus will notice this and it can help you build up a nice credit score.
- One credit card is more than enough
There is this wrong idea that if you open a bunch of new credit cards without even needing them, you might be able to increase your available credit. Wrong, wrong, wrong! This approach will do nothing but harm your rating and will lower your average account age. Keep one credit card and use it with sense. As stated earlier, it is crucial to be organized!
- Be patient! Fixing your Credit Rating takes time
Yes, there are quick ways to improve your credit rating, but usually those are the ineffective ones and will probably harm your score even more than you can imagine. Building up a good credit score takes time and the ways you can reach it can all be merged into one simple advice, as the Fico company says: manage it responsibly over time!
Author: Oliver Curtis
Hi there. I’m Oliver. I’m just a young boy from the outskirts of… Okay, that’s a lie, I’m not a young boy anymore, although I certainly feel that way at heart.