10 Best Ways To Increase Your Credit Score
The first question you may want to ask is why it needs to improve credit score. In order to know the answer, you must understand the disadvantages of having poor credit status. Bad credit limits your options of borrowing. No traditional lending house will come forward to your financial rescue. Bankruptcy, loan default are some of the issues that may negatively impact your credit report.
Poor rank of your credit status will destabilize your financial standing in more than one way. The first sign of disadvantage is the banks will reject your loan application. The banks run a check on the borrowers’ credibility which is best reflected in their credit status. So, the sub-prime market is the only source of obtaining loans for those with poor credit ratings.
The pitfall of securing loan from such source is abnormally high rate of interest. This is the price that you have to pay as the perceived risk of lending a poor credit record holder is higher. Adding to your discomfort may be limited availability of bad credit loans in the sub-prime market.
Before taking any step to work on your bad credit rank, it is important that you request for a copy of your credit status from an agency. The credit agencies compile data that they collect from different sources. The agencies will charge a nominal fee to hand over the report to you. Some agencies charge no fee at all.
Follow the simple 10 tips to enhance your credit rank. Any major improvement will help you avail the loans that were previously denied because of your bad credit score.
- Review your report. Do you see any error or wrong entry? If yes, immediately report to the agency for correction.
- Check if the entries are accurately done against your name and current address. If others’ debts are entered against your name, it will lower your credit rank.
- Do not show credit greediness by applying for several loans. It will not only increase your burden of payment but also put your credit record at a risk. Late payment or default – even it happens due to fulfillment of sudden incidental obligations – will give a heavy blow to your credit report. Think about your loan needs one by one. Spacing out the choices shows your financial acumen.
- Apply for loans that you are likely to receive. Rejection of application by multiple sources will not revive your record to normalcy; instead will push it to worse condition.
- Prove that you are much disciplined when it comes to making timely pay-off. Take a credit card which has high interest rate on it. Spend a meager amount and utilize the rest for balance clearing. In that case, you need not pay any interest. Continue this practice for at least six months and see the magic impact thereafter.
- It is better to close the credit agreements that are no longer in use.
- Make every effort possible to clear your outstanding dues.
- If you have joint finance with a person who suffers from worse credit rating, then it will also affect your own credit points.
- Scrutinize your report regularly. It will help you understand where actually your credit record stands.
- Consult an expert for suggestions.
Keep your eyes open as there may be other good options to follow for your credit rank improvement. Follow the path of logic and wait for the dramatic result in your credit rating.
Finance Guest post submition by Peter from FinanceCareGuide.com.