Increase Your Credit Score With These 4 Tactics
If you have a big purchase coming up or you’re often turned down for loans, you’re probably trying to find ways to improve your credit score. The world of credit ratings is full of misunderstanding and confusion – no surprise many people get it wrong so often.
For example, just a 50-point score increase can mean you will get your next loan approved. If your credit score isn’t where you want it to be, there are ways to improve it. Below, you can find 4 tried and tested tactics that will help you in this situation.
Pay Everything On Time
Prompt payments account for 35% of your credit score, thus you should never miss a payment – even if you use the card only once a year. It’s advised not to use online bill payments or other automated ways to pay your bills. It’s better to have your own schedule and keep everything in order. If you miss a payment, you hurt your credit score.
The first thing you should do to make sure everything is fine is to get a credit report copy. In the past, people had to go to a lender or bank to get these copies. Today, all you need to do is to download them online. Your credit report contains information about all your accounts and your credit score. Just make sure you don’t make things worse.
Pay Attention to Accounts in the Delinquent Zone
Speaking of your credit report, you can find your old accounts there. All credit cards you used in the past can hurt your credit score as well. You can find all your judgments, charge-offs, and collections listed at the bottom of the report. If something doesn’t look right, solve the problem as soon as possible.
If you make late payments on a regular basis, your score is getting lower because you can’t keep up with your account. That’s why you need to know if you’re late on any of the accounts. Try to avoid making payments for the previous month or you will hurt your score. Pay more attention to the accounts in the delinquent zone as it will improve your credit score in no time.
When you pay attention to the most troublesome accounts, it doesn’t mean you should forget about your current accounts. They need your attention as well so that they won’t become troublesome accounts in the future.
No More Delinquent Items
Another common issue with the old collections and charge-offs is to get the payment through. Check your credit report for your payments that were made several years ago, especially if you had someone who took care of your accounts on your behalf. Regardless of who the account holder was, you should remove these items from the list by paying the due.
If it sounds too complicated, you can use the services of a credit repair firm. Even though they may not help with late payments, they can help fix the items that were reported incorrectly or have been paid off. These firms have relationships with credit reporting agencies so you will keep up with all your payments and receive weekly updates on your situation. And if you have some problems with certain items, the credit repair firm will quickly find the solution.
Low Credit Balance Hurts Your Score
As you can see, your credit score depends on when you make your payments. Another thing that can significantly decrease your credit score is low monthly balances. It’s very important to make payments on time but if your balances are low, your credit score will be low as well. As a rule of thumb, credit card firms prefer to work with clients who have different ways to make payments.
Take some time to go through your credit report to find accounts, which are close to the maximum available balance as they can hurt your score. Try to lower these balances. The sooner you start doing it, the faster your score will improve. If you pay a little bit more every month, you can see major improvements in the long term. Be consistent with these payments and your credit score will go up.
When you have a look at your credit report copy, you will be able to spot the problems that decrease your credit score and work on solving them. If it seems confusing, you can always ask credit repair firms to help you. Of course, improving your credit score requires time and effort, but it won’t take too long and you will gain confidence in your financial situation