A bad or poor credit rating can boundary your borrowing options. It is the worst feeling in the world when your credit has been declined. Your credit rating is decided by your credit history. So, the first thing to improve credit rating is to improve credit score. Credit rating plays an important role when we need to access finance for business start-up or for other financial stuffs. A lot of people are looking for the ways to improve their credit rating and their credit score but they often end up doing it wrong.
Here are 25 tips to follow which can improve credit rating.
1.Make sure you check your credit reports regularly. This will give you an idea on where to start and will also make you aware about the scope of improvement. Get a copy of your credit report for free from the three credit agencies every year.
2.If you see any errors in your report, file a dispute immediately to your creditor. Credit errors can have a huge effect on your credit score as well as on other future transactions. It can lose you up to a hundred points and those mistakes aren’t even your fault so make sure there are no negative items on it.
3.It is important that you pay down all of your credit balances regularly all the time.
4.If you’re finding it hard to pay for your balance, ask for a credit limit raise and avoid putting more debt into it.
5.Don’t close accounts especially if you have remaining balances on it. Closing your account will do no good for your credit report and it will hurt your score too.
6.Avoid applying for a credit before you make huge purchases like houses, cars, etc
7.Always, always pay your bills on time. This is probably the easiest way to boost your credit score.
8.Don’t be shy to ask for a goodwill adjustment. Your credit will remove one or two late payments on your credit report.
9.Use your old credit card and make small purchases.
10.Don’t forget to apply for different types of credit.
11.Make shopping for new loans or credit cards fast to avoid inquiry fees that will cost you 10 percent of your credit score.
12.Get yourself a secured account if you can’t qualify for the traditional ones. These are low risk and are easier to get. Just don’t forget to pay your bills on time.
13.Do not consolidate your credit into one account. Again, closing credit accounts will do no good and you’ll end up hurting your credit scores.
14.If you have a student loan, contact your lenders immediately if you still have late payments for it.
15.Don’t forget to contact every company that you have paid for every month. Call your cell phone providers, Cable Company, electric and water company and make sure that they report.
16.Make sure you are updated whenever a balance is reported on your credit report. The date you paid and the due date they input is usually different, so it is important that you check up on it regularly.
17.You may want to help your friends out by co-signing them a loan but doing this may only cost you your credit score. They are co-signing because they are having trouble financially, so most probably, they won’t be able to make the monthly payments on time and of course, as a co-signer, you will be held responsible for everything.
18.No matter what you do, always pay for your bills early and avoid paying it late.
19.Make sure you contact your creditor regularly. You’ll be updated for anything that needs to be fixed immediately.
20.Discipline yourself and avoid going overboard your credit limit.
21.Use your card sparingly and try to pay for cash whenever you can and especially if you can’t pay at the end of the month.
22.Avoid overspending and use the money to save up for an emergency fund.
23.Stay below your credit card limit for at least 20 percent.
24.Avoid different multiple inquiries within a month.
25.Keep your credit healthy by maintaining it at all times.