7 Efficient steps on how to improve credit score
If you’re thinking to buy a house or a car, the most important thing to look out for is your credit score. If you’ve a blemished credit score, the chances of getting a good car loan or even a mortgage can be very low. Although there are no proven solutions but the following steps will tell you how to improve credit score.
How to improve your credit score
1. Concentrate on your payments:
On time payments can do wonders to your blemished credit score. If you don’t have money in hand, sell some of your stuffs online or do some part-time jobs to speed up the process. It’s important to note that punctual payments accounts to almost 65% of the credit scoring equation.
2. Keep your credit card balances low:
Try to use your credit card as less as possible. Whenever you go for shopping try to use cash instead of card. In case you use your credit card, aim to use till 35% or less of the credit line.
3. Keep accounts with balances open:
You may also be tempted to close down the accounts which you don’t use. But closing these accounts can affect your credit negatively. Instead you can use these old cards to buy something small every 4-6 months, which will prevent the creditors from reporting negatively.
4. Check your credit report:
Analyze your credit report by obtaining a copy of your credit report from the credit bureaus. This will help you to find out which accounts you need to work on. Also check out, if your report has any incorrect information. If you find any then you have the right to get it removed.
5. Deal with collection accounts:
Paying off debts that have been sent to collections won’t improve your score much but only help you to lower your outstanding debt. Try to negotiate with the collection agency to report the account as “paid as agreed” or remove the notation from your credit report entirely.
6. Keep new credit card request to a minimum:
Don’t request for any unnecessary new credit. The lenders assume it as a sign that you’re desperate for cash. Keep the requests for new credits to a minimum if you’re planning to improve your credit score.
7. Talk to your creditors:
You can also talk to your creditors who might give you some tips on how to improve credit score. Many credit companies have hardship programs that will reduce the monthly payments until you can get out of financial hardships.
So, if you’re wondering about how to improve credit score, you can follow the above mentioned steps. You’ll undoubtedly be able to improve your credit score. But, it’s important to note that it will take time. You’ve to be very patient if you want to see the improvement on your credit score.
Useful resources :
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