If you are currently dealing with a poor credit rating, then it might be having an effect on various aspects of your life. Your credit rating is used by all kinds of lenders to determine your eligibility for several financial products, from mortgages and bank loads to mobile phone contracts and even bank accounts. Because of this, it’s no surprise that raising your credit rating might be on the top of your agenda.
However, if you need to increase your credit rating, it’s not something that can happen overnight. We’ve put together some top tips to help you give your credit score a boost.
Tip #1. Check Your Credit Report:
The first step to improving your credit rating is being fully aware of what it is, and exactly why it’s low. You can do this by checking your credit rating; this can easily be done online with a range of different services that offer the option to see your full credit report in detail, some of which are free.
It’s important to take a close look at your credit report and understand exactly where it’s being brought down; look out for things such as missed payments, going over credit limits, and multiple credit searches on your account – these can all bring your rating down. Don’t forget to look out for anything that could be a mistake, either, since rectifying any errors could improve your rating.
Tip #2. Use Your Credit Card Less:
Many people believe that their credit rating is only affected by missed or late payments, however, the amount of credit that you are spending also has a significant effect on your overall rating. In general, if you are using over 50% of the balance on your credit card(s), then this could bring your score down and cause problems with getting financial products in the future, since potential lenders may view you as relying too heavily on credit and therefore deem you to be a high risk.
If possible, you might want to consider applying for a new credit card and conducting a balance transfer to take advantage of the interest free period to get your credit card debt down. You can visit Bankrate for more information about the options available.
Tip #3. Pay Bills on Time:
It’s not just your credit repayments that will affect your credit rating; your utility bills can also determine whether it goes up or down. Even if your priority right now is saving up for a major purchase such as a new house or car, the last thing that you want to do is start paying your bills late – this could ruin your chances of being accepted for a huge financial product such as a mortgage, even if you’ve got a large balance in your savings account. It’s always better to put less away into savings and make sure that you have enough to cover your monthly bills in the bank.
If you follow the three tips above, you should start to see your credit rating slowly increase.