The sole purpose of your credit score is for creditors to see what level of risk you are before they lend you any kind of finance, whether you’re looking at applying for a mortgage, personal loan, clothing shop account or even at times applying for a job.
Therefore the better your score the better the chances will be of you obtaining the loan and getting cheaper interest rates. With that said here are six ways to boost your credit score.
- Something as obvious as making your payments on time
As your payment history does affect your credit score. You’ll have to make sure that you make your monthly debt payments on time and in full.
- Close unused credit accounts
The less credit lines you have against your name the lower the risk you are towards lenders. You should close all credit accounts that you’re not using and tell the creditors to inform the credit bureaus that you’ve closed the accounts.
- Avoid applying for credit while you’re in the process of improving your score
As every time somebody does a credit check on you, it will have a negative impact on your score.
- Avoid using revolving credit accounts
This is a debt which you can pay back on your own time. And the accounts normally have high interest rates and will cause damage towards your credit score.
- Make arrangements with your creditors
If you see that you’ll not be able to pay of your debts on time, contact them and make arrangements. Don’t wait for the creditors to contact you.
- Obtain some sort of credit
As no credit history can be bad for you making it harder for creditors and lenders to establish your true credit worthiness. Therefore get a credit card, when used responsibly it can improve your credit score. And help build your credit history as credit card companies report your payment activity to the credit bureaus.
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