Getting your credit score in order is a really important tasks as a bad credit score can bring with it a lot of negativity for many aspects of your life. There are lots of people that have poor credit scores, and these negative scores aren’t reserved for one particular type of person in society. Anyone can be hit with a bad score depending on certain factors in their lives, and it’s important to do everything you can to rectify this. We’ve put together a list of important tips that can help you to improve your credit rating to open up more financial opportunities and ultimately improve your life.
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Keep Up With Your Payments
Your credit score is basically a way to prove to lenders that you are good at paying back loans and debts. People with a poor credit score usually have shown that they have had trouble doing so in the past and will give lenders pause when considering whether to accept your application or not. If you make sure you pay your bills and rent or mortgage on time, your credit score will slowly go up as you prove that you’re trustworthy.
It’s all well and good finding ways to trick the system, but if you have a low credit score, this might be a good sign that you need to start working on your ability to make these repayments for your own peace of mind.
Avoid Excessive Credit Checks
There are many services out there that will run a credit check on you to make sure you’re reliable for making repayments. If you’re waiting for your score to go up however, these checks can actually begin to harm your score as most credit checks will actually count against your score. This is called a hard credit check and is when the check is done by a lender.
Checking your own score through companies like Experian, however, are classed as soft inquiries and won’t hurt your score. To reduce the negative impact on your score, try using services that won’t run a hard check. Companies like Accept Phones offer phone contracts with no credit check for example, so that you can set up your phone contract without harming your score, and without running the risk of being rejected for the contract either.
Actively Build Your Credit
One of the best ways to build your credit score is to actually borrow money, as long as you make sure to pay it back on time. This is essentially an activity where you’re proving your ability to handle repayments and have a keen eye on your financial situation. If you have a credit card, this is a great tool for building credit. Don’t spend excessively, however. Make sure you only make purchases within your budget and make sure you pay off the card as soon as possible before you are charged any interest.
Usually this means repaying within the month, so take note of each payment, set alarms and reminders to repay, and consider avoiding making more than one payment before paying the last one off so you can keep better track of your outgoings. Making too many payments on your credit card might land you in hot water when you’ve spent over budget and can’t repay.
