When it comes to the matter of your credit score, there’s really only one way to go. Do what every other responsible consumer does to maintain a good credit score. Your efforts will go a long way in the end. But what if you’re like most people who are stuck with a poor credit score because of years of mindless financial habits and decisions? If that’s the case, don’t fret. While it may take time to repair your poor credit rating, it can be done with commitment and a little hard work. As a start, here are some tips that will help boost your credit rating effectively:
Start with your credit files
Your credit files cover a large amount of data on you. Errors can happen whether you like it or not. It’s rare but they can still happen. So before you move forward with any major decisions, make sure to check your files annually for these errors. Have them fixed if you find any then go from there.
Register to vote
If you’re not yet registered to vote, now is the time to get it done. Once you’re on the electoral roll then it will be easier to get credit. In case you’re not eligible to vote in the UK, you can send proof of residency to credit agencies instead.
Minimize credit applications
If you’ve applied for a personal loan and you received a rejection, the tendency is to apply again and again until you get approved. That move, however, has repercussions for your credit score. You’d be better off minimizing your credit applications because then you’ll also minimize the footprints left on your credit files. Rather than keep applying, use free calculators to check your eligibility first.
Request credit line increase
If you’re eligible for a credit line increase then you should take advantage of it. Once your credit limit is increased, that means that your credit utilization ratio is improved. So long as you keep your charges minimal and you pay your bill on time and in full every time, your credit score will vastly improve in no time.
Minimize use of credit cards
When you’re trying to improve your credit score, you’d still want to use your credit cards as opposed to not using them at all. Just make sure that you minimize the charges. In general, keeping your charges below 30% of your credit limit is a good guide to stick with. Of course, you’ll have to pay credit cards in full to see improvements in your credit rating.
Pay off debt
If you have an enormous amount of debt under your belt, you’d want to create a plan to start paying them off one by one. Sure, paying them all off will take time but by doing so you’ll be ensuring your credit rating’s definite and significant improvement. Considering that the amount of debt you owe is 30% of your credit score as per the FICO scale, paying off debt is one of the key steps you can and should do if you want to improve your credit score effectively.
Pay your bills on time
Finally, pay your bills on time. That includes all your bills from personal loan payments to utility bills and of course, credit cards. More than your debt owed, your payment history is 35% of your credit score. If you want to significantly boost your credit score for good and for long term, it’s time to make a payment schedule. Plan your payments in a way that you’ll no longer miss any bill and you’ll be reaping rewards very soon.