A good Credit Score is the key to unlock all financial benefits or facilities offered by different financial institutes. It gives easy approval for credit cards and loans. It is often seen that bankers and other creditors look at your credit score to determine whether you are eligible for a loan or additional financing. In case, your credit score has been reduced; there are a many ways that you can follow to improve your credit score.
Here are a few simple strategies that will assist you in improving your credit score:
1. Make Payments on Time
One of the best things you can do to improve your credit score is to pay bills on time. Late payments will take away points from your credit report every month. You’ll be surprised to know that your payment history accounts for about 35% of your credit score. If you make a habit of paying bills, including credit card bills and even electricity bills on time, your credit score is going to take a significant hit.
Late payments and settle down account for less can harm your credit score. You can make use of automatic payment reminder or calendar reminders to ensure that you make bill payments on time every month. If any of your payments are due after the last date, you must pay them as soon as possible. Missed payments indeed appear as negative information on your credit report for about seven years.
2. Pay your full bills
If you’ve got a habit of paying the minimum fees on credit card bills, you must start paying the full amount. It will be beneficial to enhance your credit scores. Even if you pay an extra amount, it will decrease the amount of interest you spend in the long run.
3. Pay off Old Debts
At the time, you have a credit report in your hand; you must check its each and every detail minutely. The credit utilization ratio is an essential part of your credit score. The credit utilization ratio is calculated by dividing credit card balances by your total credit limit. Lenders prefer low ratios of about 30% or even less. The best credit scores have very low credit utilization ratios.
4. Don’t Close Unused Credit Cards
Some people think that closing unused cards is a short-term strategy to improve credit score. However, it’s not a good practice to adopt. You must keep credit cards open until they do not cost you any money in annual fees. It is a smart strategy to increase your credit utilization ratio. You’ll be surprised to know that owing to the same account, and fewer open accounts will lower your scores.
5. Dispute Any Inaccuracies on Your Credit Reports
You must check your credit reports from all three credit bureaus (TransUnion, Equifax, and Experian) for any inaccuracies. Inaccurate data can drag your scores down. Therefore, you must verify all the accounts listed on your credit reports are correct. In case, you see any error; you should dispute the incorrect data and get it corrected right away.
Prime Credit Advisors is here to assist you in improving your credit score. Visit our website (Prime Credit Advisors dot com) and schedule a free consultation to get started now.