3 Ways To Quickly Improve Your Credit Rating
If you need to give your credit score a big boost, you should have time. Time to pay off the loan, raise your loan, or raise more income. The point is, then, that credit assessments include years of financial history in the calculations, not just your most recent transactions.
However, there are a few things you can do to improve your credit rating in the short term. Just like a temporary facelift for your finances. This can be good, for example, if you are about to borrow money or get credit for some major purchase.
1. Keep track of the credit card limit
A big factor that is included in your credit rating is how much available credit you have compared to how much you actually use. The lower the percentage the better for your credit rating.
To give your credit rating a boost, you can therefore pay off your latest credit card bill and then make sure that you do not use more of the credit until the loan is secured.
What you may not know: Even if you pay back in full each month, you can still have a higher user percentage than you think. This is because some issuers use the balance on your bank statement as the credit.
So even if you repay everything every month, your credit usage will weigh down your monthly balance.
One strategy: check if the credit card issuer can accept multiple payments spread over the month. This way you keep your balance up to date.
2. Pay your bills on time
One of the most important ingredients in a good credit rating is that you have paid your bills on time. For your Creditworthiness is determined by the items contained in your credit report. If you are bad at paying your bills – or paying them on time – it affects your credit and damages your score.
Of course, putting money in a savings account for a large purchase is a good idea. But don’t do it at the expense of the usual bills.
Have you ended up in enforcement authorities register because of unpaid bills – yes, then your credit rating is Sabbath for a long time to come.
Probably the easiest thing you can influence to maintain a good credit rating is to always pay invoices on time. Partly to avoid extra costs in the form of reminder fees, but above all to avoid payment remarks and enforcement authority. Regularly setting aside time for your personal finances is something you should prioritize. If you have payment problems you should never ignore the invoices, call the lender instead to find solutions that work for both (eg installment payments).
3. Old, paid debt is positive as “credit CV”
Some people mistakenly believe that old debts on their credit report are a bad thing. As soon as they get their home or car paid off, they call to try to get the debt off their credit report.
But it’s not always a good idea. Good debts – that is, debts that you have handled well and paid back as agreed – are good for your rating.
The longer your history of good debt, the better it is.
Trying to get rid of old good debts is like getting top marks in school and then trying to get rid of it 20 years later. You never want the top grade to disappear from your history.