Increase your likelihood of getting both a loan and a lower interest rate by getting a good credit score. Lenders are more likely to give a loan to someone who poses less of a risk.
How then do you prove to a lender that you’re low risk? Here are a few things that you can do to improve your credit score.
Possess responsible buyer behaviour
You can do so by spending responsibly. Given the way the lenders will scrutinise your spending behaviour and financial history, you need to make sure that there aren’t any red flags in your report. Do this by not taking out additional credit when you can’t afford to and avoiding unnecessary costs (You don’t need both Netflix and DSTV).
Get out of debt
Borrowers with small amounts of debt might not have any trouble putting aside enough money each month to make their repayments. But those heavily in debt will need a strategy, and some might even need to rely on a debt consolidation loan to make their debt manageable.
Do this through a repayment plan this means assessing all of your current debt and expenses and then working out a strategic plan to pay off your debt faster. Or through a debt consolidation loan can be a good solution if you find yourself with many monthly instalments or uncontrollable debt.
Pay on time and don’t miss payments
To avoid missing payments or paying late, both of which have a negative impact on your credit score, consider making your payments via debit order. The more consistent you are in making regular payments, the more your credit score will improve.
If you’re struggling to make ends meet and won’t be able to make a payment on time, talk to your creditors to find a solution. Responsible lenders don’t aim to trap their customers in inescapable debt. And many will work with you to restructure your debt in such a way that you can pay it off.