5 Ways To Improve Your Credit Score
You might be wondering why on earth you would want to improve your credit score when you are doing just fine thank you very much. And the last thing you want is more credit! However, all the positive information about you at the credit bureau makes you very attractive to creditors who will entice you to come and spend more money ? the higher your credit score, the more credit you will be offered.
Having a good credit score can work in your favor and be a valuable money management tool. If however, your credit score is low, you could have problems achieving the financial goals you have set for yourself. So, let?s take a look at the ways you can improve your credit score so that any time you need to, you can buy that new car you have always wanted.
1 ? Correct Mistakes on your Credit Report: You can apply for a copy of your credit report from the national credit bureau once a year, and also before you apply for any finance so that you do not get any unexpected shocks. Then you check it from start to finish. Your credit score is based on what is in these reports so if there is a mistake it can affect the outcome if you are applying for finance. There might be a payment in the report that is listed as not being made in time. As insignificant as that sounds, it needs to be rectified and that can take anything from 30 days to 3 months.
2 ? Always Pay Accounts on Time: When you receive your accounts from your creditors, they always have a date by which payment should be made. You have to make sure that you pay on or before that date otherwise you will be penalized, and listed as an unreliable risk. Once again, if you are planning to purchase a house, in the months leading up to that purchase, do everything by the book as any late payment or missed payment will reflect very badly on you. If you missed a payment 2 or 3 years ago, that is not as important as missing one currently.
3 ? Keep your Credit Card Balances in Check: This is the most important part of your credit report ? the percentage of what you owe on your credit cards in relation to your credit limit. Generally you should not owe more than 25% of your total credit limit. If you transfer credit card balances to one credit card account, it will not work in your favor ? it will only increase the percentage of debt to your total limit. So rather pay it off as quickly as you can and keep the balances below the required 25%.
4 ? Keep Zero balance Accounts Open: If you have 4 credit card accounts but are only using two of them, don?t think it will help to close the other two. All that does is lower your balance to limit ratio as you have effectively reduced your total credit card limit. Also don?t open new accounts because obviously they will show no transactions and there no track record of regular payments.
5 ? Apply for a Small Loan you don?t really Need: No, it is not as stupid as it sounds! This can benefit you in the long run by giving you the opportunity to show the credit bureau how responsible you are by making timeous and regular payments on this loan every month. This reflects as positive activity on your record. And it is a different form of credit so it adds to the credit variations on your record.
There are numerous advantages to making the effort to improve your credit score. Next time you want to buy a big ticket item like a new car, and you have a perfect, blemish free credit
This article was originally featured on SA Debt Counselling, a website dedicated to assisting people who are in need of financial assistance.
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Source: http://financehelpnews.com/business-finance/5-ways-to-improve-your-credit-score
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