Your credit score — the three-digit number lenders use to decide how likely it is they’ll be repaid on time if they issue you a loan or a credit card — is an essential factor in your financial life. The higher your score, the more likely you are to qualify for credit cards and loans at favourable terms, and this helps you save money.
If you’re like many others, your credit history may not be where you want it. Improving your score takes time, but the sooner you address the issues that might be dragging your credit score down, the sooner your credit score will go up.
The first step to increasing your credit score is to find out what the number is. Many banks now offer a free online option to check your credit score. Log into your online account or call your bank to see how you can receive a detailed outline of your credit history. You will discover which factors are affecting your score the most.
Seeing your score will help you understand the changes you can make to improve your financial situation. From there, you can take steps to build up your credit. If you focus on the following actions, your credit score will gradually start to improve.
Pay Bills on Time
When lenders review credit reports and request your credit score, they want to know that you’re dependable. They’re interested in how reliably you pay your bills. Past payment performance is considered a good indicator of future performance.
Paying your bills on time every month can positively influence your credit score. If you’re struggling to pay bills, consult with your banks or service providers to see if there are alternative options with lower fees.
Pay Off Debts
Paying off debts doesn’t happen overnight, and it’s not always a simple process. However, if you want to build your credit score, it’s crucial to pay off any debts as fast as possible. Tackling debt can feel daunting, and many people don’t know how to approach it or where to go for help.
Have you considered the benefits of a Debt Consolidation Program? Managing multiple debts on your own is challenging, especially when you’re trying to increase your credit score. With a Debt Consolidation Program, all of your debts are combined into one monthly payment. You’ll save money on interest charges — which can ultimately lead to faster debt relief.
You’ll also receive valuable professional advice from a certified Credit Counsellor. They’ll negotiate with each of your creditors, create a manageable budget, and stop the collections agencies from calling.
Keep Unused Credit Cards Open
As long as they don’t cost you money in annual fees, keeping unused credit cards is a useful strategy, because closing a credit card account may increase your credit utilization ratio. If you owe the same amount but have fewer open accounts, your credit score may decrease.
Credit scores are an essential factor in overall financial wellbeing. These days, they’re requirements for applying for a new apartment, a car, and even a new job — so, stay on top of your finances and be prepared!