Your credit score is a crucial part of your financial status that should not be ignored. This is because it dictates whether you are eligible for a loan or the rate offer you will get on your mortgage.
Since America’s economy recovered from the Great Recession, most people have managed to gain footing on their credit scores. However, almost a third of all Americans have what is referred to as “bad” credit score. If your credit score falls under 600, it is time to give it a boost and here are the top 5 ways to help you raise your credit score.
Credit card companies always send your credit report at least once a month. Therefore, if for example you have a $1000 limit on your credit card and you make payments once every month, your credit card report will read a payment of $1000 and a balance credit of $1000. However, making payments twice a month will lower your credit balances and thus increasing your credit score.
Raise your credit limit
If you have always met your credit limit every month and are not in a position to make the full payments, it is time to take a new approach. Call your Credit Card Company and request for an increase in your credit limit.
For example, if the limit on your credit card is $1000 and you always exhaust all of it, try requesting for an increase to $2000. However, the trick here is that; once you get the increase in the limit, do not use up all of it, but stick to your normal usage of $1000. This will definitely card your credit utilization by half!
Clean up your credit report
This should be your first step actually. You can request an annual credit card report or visit AnnualCreditReport.com and ask for one free credit report from each of the following three main credit reporting companies; Experian, TransUnion, and Equifax.
You are entitled to one free credit report every year. Once you have requested it, be prepared to save it on your computer or print it out. Once you have it, it’s now time to examine it and in particular look for any late payments or late bills. In the case of any inaccuracy, the report has the address to where you should send your dispute. Keeping a clean credit report is essential not only for your credit score but also for your job prospects. Employers always pull up your credit report to see your eligibility for employment or promotion to certain positions.
Tone down your credit utilization
The credit utilization rate is a ratio of what you owe to the amount of credit you have. For example, if your credit limit is $1000 and you use only $500, you have a 50% credit utilization rate.
Most experts recommend a maximum of 30% credit utilization. Therefore, if your rate is past this point, paying up your credit and taking it back to 30% will largely boost your credit score.
Try a different issuer
If your credit card issuer is not willing to give you more credit, consider getting a new card from a different issuer. However, do not go overboard and get yourself 5 new, different credit cards. Just stick to a maximum of two, and you will be able to boost your credit score.
In conclusion, checking out personal installment loans for bad credit near you can help you establish how to get a better credit score. These 5 tips may not work overnight, but with time you will come to appreciate the results.