Looking to improve your credit rating?
Well, we don’t blame you! A quality credit score comes in handy in a whole host of ways. Among other benefits, you get access to the best credit cards and affordable loans, saving huge sums of money in the process.
You don’t have to be a rocket scientist to build good credit either. All it takes is the right approach and a commitment to the cause. Want to learn how it’s done?
Keep reading for a selection of top tips for building good credit.
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Don’t Be Late With Bill Payments
The key to building credit ratings is demonstrating that you’re a low-risk borrower. In other words, you’re trying to prove that anybody lending you money (be it through this website or any other) can expect to be paid back in full and on time.
That’s where your bills come into play.
Basically, late bill payments are a bad omen as far as credit officials are concerned! They’re taken as evidence that loan repayments would suffer the same fate, causing your credit score to take a tumble as a result.
Conversely, keeping on top of your bills is a great way to give it a boost. Pay your bills on time every month and you’re sure to see your credit rating improve.
Lower Your Credit Utilization Ratio
Credit utilization is the percentage of your overall credit limit that you use.
Imagine having 2 credit cards, each with a $5,000 limit. Max them out each month and your utilization ratio would be a whopping 100%. However, if you only spent $1,000, then it’d be a paltry 10%.
Keeping that utilization ratio as low as possible (somewhere around 20% is best) is another effective way to improve your credit rating. It lets lenders know that you’re sensible with credit and in control of your monthly finances.
Identify and Correct Credit Report Problems
Make sure you check your credit reports each year as well. You can access them from each of the three credit bureaus once per annum (without impacting your credit score) to assess your current credit score standing.
Sometimes, though, you’ll also notice errors, inaccuracies, and inconsistencies that have damaged your rating.
Clearly, it’s in your interest to identify such issues and dispute them with the relevant parties. If you’re successful, you can see an immediate improvement to your credit score.
Remember These Tips to Build Good Credit
Anybody who improves their credit rating stands to gain in a plethora of ways.
Loans become accessible and more affordable, better credit cards are made available, landlords are happier to accommodate you as a tenant, and so on and so forth. The list goes on and on.
The tricky bit is knowing how to get started! Hopefully, the tips in this post will help in this regard. Keep them in mind and you should be able to build good credit in no time at all.
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