What Are the Best Ways to Improve Your Credit
February 19, 2019
For those of us who don’t know, a credit score is the numerical expression of your creditworthiness as an individual. Various lenders such as banks or credit card companies use these credit scores to evaluate a person’s potential risk of defaulting on their credit as well as to mitigate their losses in the event of bad debt.
In other words, lenders will use this score to determine whether or not you qualify for a loan, what interest rates to charge you, and what credit limit to put on you. Credit scores are not only used by lenders but also by other organizations such as mobile phone companies, various government departments, insurance companies, landlords, etc.
Keep in mind that different lenders may use different credit scores, or even between different products from the same lender. A good credit score is typically above 650.
An equally important fact to remember is that the most recent information in your credit report will have the most impact on your overall credit score. So, what are the best ways to improve or maintain a good credit score?
Check Your Credit Report Regularly
The first step in getting your credit score back on track is to know what it is, in the first place. There are also other reasons for checking your report that will help you with your credit score. Even the slightest inconsistencies such as a wrong address can have a negative impact on your score. So, if you notice any errors, report them immediately.
Second, if you notice any fraudulent activity such as the application for credit in your name, contact the reference agency. Lastly, having someone else’s credit score linked to yours through a joint account can affect your rating.
Do Not Take Loan Applications Lightly
Only apply for credit when you need it. An all-too-common mistake that people make is to ask for loans when they’re looking for credit. But keep in mind that every time you apply for credit, be it a personal loan, a car loan, or a credit card, you are shaving points off your score.
Making too many loan inquiries in a short amount of time is a sure way of sending your credit score plummeting to the bottom. So, every time you apply for a loan, make sure that you need it.
Other Methods to Improve Your Credit Score
- Pay your bills on time.
- Have an active credit account with your name on it. It also applies for phone plans, mortgages, and all other such bills. If you’re the one paying them, make sure your name is on the account.
- Work on eliminating your debt.
- If you have old debt that you’ve paid off, keep it on the record for as long as possible. The same goes for old accounts where you have a solid repayment record. These are indicators that you pay your debts on time.
- Eliminate all credit card balances, no matter how small.
- Register on the electoral roll.
Improving and maintaining your credit score is an excellent way of showcasing your fiscal responsibility. It will help you every time you want to access a loan, move to a new location, buy a car, etc. In the meantime, however, you can get a loan at Illinois Lending Corp. We do not require that you have a good credit history so apply today!