5 ways to improve your credit score
So you’ve been brave enough to find out where you stand when it comes to your credit score and it’s looking a bit bleak? Don’t stress, a little bit of corrective behaviour can go a long way in improving your credit score.
The following are five simple steps you can take to improve your credit score and spare yourself some cash in the long run with one big reward for a good credit score: lowered interest rates!
Pay On Time
Your credit score gives credit providers an overview of your general credit behaviour. Sadly, no one likes being paid late. Avoid waiting for your creditors to call you first before you pay them. It also counts against you if you choose not to pay the entire instalment amount. So when you take on a new account, be realistic about how much you can pay back every month and when you would be able to do that.
Slow Down On The Debt
When taking up credit, the numbers always tell a story. Keep your credit limits high and your due amounts low. Of the overall credit limit given, you should only use between 35% and 50% of that. Having too much debt will affect how much you owe and make it clear that you have less disposable money after making repayments every month, which counts against you.
Fix The Mistakes On Your Report
When checking your credit score you should also be checking the details in the report to make sure that they are correct. If your name is spelled incorrectly, for example, it could mean that other credit accounts aren’t linked to your profile.
Checking your report will also help you flag any accounts that shouldn’t be listed under your profile and help you pick up on fraudulent activities that could be happening under your name.
Plan For a Credit Application
Having too many credit enquiries and applications within a short space of time will count against you and affect your score negatively. You should have minimal credit queries when you are applying for credit, this will also improve the chances of you getting approved for credit.
Avoid Using Your Credit Card Often
Use your credit card as little as possible and practice using small amounts that you pay back within a month of use. Not only will this small habit make you more attractive to lenders, but it will also show that you are reliable and good at paying back your debts on time.
Have no idea what your credit score is looking like? You can get a free credit report from us.