Lets Improve Your Credit Score
What is credit score? It is a three digit number that tells creditor whether you can obtain a loan at a favourable interest rate. If your credit score is very bad, there is also a possibility that your application will be rejected altogether. Naturally, you don’t want that to happen and this can only be avoided if you have a good credit score.
It is estimated that 60% of the adult population have a good credit score. To achieve this pay your bills on time, including credits cards and other loans that you have had in the past. Doing so will avoid incurring any penalties that will be reflected in your credit report.
So what can cause an adverse rating? People can often not resist the urge to spend and the amount outstanding continues to grow. This is compounded by the increase in interest that is due.
Some people are late with their payments. Those who ignore calls or letters from the bank will have the payment marked as “unpaid.” This information is posted on your credit report so that lenders, whom you might approach in the future will already be wary of giving you credit.
Good housekeeping is not enough to maintain a good credit record. You have to be seen to be reducing your liabilities in order for your rating to be favourable. It is also important to remain in close dialogue with your lenders.
You could always turn to friends or relatives to help if you have to. However, whilst they are unlikely to charge you interest is it really worth the risk of you letting them down if you run into further problems.
Control your credit card expenses to improve your credit rating. Keep your balance at less than a quarter of the overall limit. Better still if you can pay it off regularly then do so.
If you have done well and the bank wants to increase your credit, let them just be sure to stick to the strategy of reduction. Just because they increase your facility does not mean that you have to use it.
Always check your credit rating once a year. It is not unknown for people to have mistakes lodged in their report that adversely effect their rating. If you find any you have the right to report them immediately and have them removed. Your rating will improve following their removal.
Always monitor how you are managing your finances. You may have done well this year but things may change in the future. Always ensure you monitor your finances as there is no one else to blame but yourself if you slip back into bad habits.
by Phil Craven