Maintaining a good credit score over the years is the most crucial factor that decides whether a lender will trust you to get a loan or not? Likewise, your credit score is also critical in getting a bank loan at the terms that suit you best. Therefore, maintaining a good credit rating is essential for your credible financial character. However, if your credit score is not up to the mark and you are keen to improve it. Don’t worry; we will provide you with an array of useful tips in this article that will surely help you improve your credit score.
5 Proven Tips to Improve Your Credit Score
1) Always Make Payments on Time
The delayed or missed payments leave the most drastic effect on your credit score. Therefore, you should pay your utility bills and credit installments on time every month. If you have a terrible habit of making payments after the due date, you will never get a credible credit rating.
2) Spend Your Credit Wisely
You should be able to set an optimal limit of your monthly credit. Exceeding your credit limit causes a decrease in your credit score. On the other hand, you should also use the minimum credit allowed by your card issuer because saving too much credit every month may negatively affect your financial character.
However, withdrawing cash from your credit card frequently may leave a negative impact on your credit score. Therefore, try to pay online as often as possible. Similarly, try to make small but frequent payments throughout the month instead of making a few bulk payments.
3) Build up Your Profile
The ultimate purpose of improving your credit score is to get a loan for your personal or professional use. Therefore, you should build up your business profile by getting small loans and using those loans properly. Likewise, open multiple accounts in different banks and try to use all of those accounts regularly.
You may not be able to get a loan from a giant lender today. However, you can try to get a small loan from a microfinance bank. If you make the best use of this loan and repay it in time, then you can apply for a loan from a mainstream bank later after building your credit.
4) Show the Stability
A lender is always looking for some solid guarantee that you will be easily accessible. Therefore, you should stick to one residential address for a long time if you are keen on improving your credit score. You can include a landline number in your credit record to ensure the lender that you will always be living at the same place.
Likewise, register to vote and submit your electoral information to your CRA to improve your credit rating. Although having different credit accounts is a good strategy, always try to use all the cards regularly because it shows your commitment to your bank.
5) Avoid a Suspicious Partner
You may be doing all the things right regarding your financial activities. However, if you have a partner with bad financial behavior and poor credit history, your credit score will never go up. Therefore, you should ditch financial ties, i.e., a joint bank account or business venture with such a partner. Never let someone else hold your credit score down.
Remember, you should keep checking your financial statements from time to time. Verify the statements are correct and if not, immediately contact your bank to correct the mistakes. Otherwise, a minor system or human error may affect your credit score drastically.