Having a great credit score can positively impact your life. You will be able to get a mortgage, loan or credit card easily. Loans and credit cards you apply for are likely to be priced cheaper to those with poor credit scores.
Banks will advise you to strive hard to have a clean credit profile and a great credit score. A poor credit score can be improved if you implement some strategies.
How you can improve your credit score
You can improve your credit score. A poor credit score can also be repaired. Below are some of the ways you can improve your credit score:
Check your credit score
It is a good idea to request for your credit score. A lot of people think that you only need to request for your credit score when you know that your credit profile is bad. I advise everybody to request for a free copy of their credit report from a credit reference agency or a credit bureau.
Your credit report will contain the details of the debts you owe and show if you have defaulted in the past or not. It generally shows the health of your credit history.
Knowing how your credit report or score looks like is a way to kick start the process of repairing your credit score if it is already bad.
Pay your credit card on time
Never default on your debt repayment. Do you have an unpaid loan or a credit card? Try as much as possible to make your repayments as at when due. If you miss your repayment for a day, your credit score can be messed up.
Pay all debts owed on time.
Cut down on the amount of debt you owe
It is always tempting for those with poor credit scores to continue to take more loans or credit cards in order to pay back some of their existing debts. Never go this way. It is better to cut down on your existing debts if you know that you cannot manage them.
Amassing a huge volume of debt may negatively impact your credit score. Even if you are not a defaulter, your credit profile may suffer if you continue to pile up loans and credit cards.
Do not make multiple loans or credit cards applications
The algorithm hard coded into the credit scoring software will give you a low credit score if you have applied for a lot of loans, credit cards and other debts in the past.
When you continue to make multiple loans or credit cards applications, you may be seen as a risk; hence your credit profile may be given a lesser score.
Do not leave any debt unpaid
Even if you have a poor credit score, never leave all your debts unpaid. Try as much as you can to settle part of your debts. Ignoring all your creditors will further reduce your credit score.
Use a payment reminder
If you are the type who is a bit forgetful, a payment reminder may help you to keep up with the dates of repayments of your debts. You are likely not to miss any repayments if you use a payment reminder.
You can also set up a direct debit on your bank account to pay down your debts automatically every month.
Though this strategy is controversial, those who live in upscale areas are given higher scores than those who live in less affluent areas.
In London for example, people who live in Zone 1 areas like Baker Street are likely to have higher credit scores than those who live in Zone 6 areas like Erith, Kent.
Do you know any other ways anyone can use to improve his credit score? If yes, why not share with us in the comments section.