If you have a poor credit rating, there’s really only one solution to the problem – improve your credit score. Otherwise, you’re only putting yourself in an even more difficult situation. You won’t easily get approved for a personal loan and if you do get approved, the interest rates are much more expensive. This is why improving your credit score is not an option but a necessity. And if you’re ready to boost your credit rating, here are some things you can do:
1. Pay your bills on time
If you want to improve your credit score, one of the most effective ways to do so is to commit to pay your bills on time. It would be ideal to set-up payment reminders for all your payables. Or better yet set-up automatic debit deductions so you never have to worry about your due dates anymore.
2. Reduce your debt
If you have high credit card balances and other debts then it’s time to pay some of them off. One of the main factors that significantly affects your credit score is the total amount of debt you owe. By creating a realistic repayment plan for your debts, you’re essentially improving your creditworthiness. As you pay off one debt after another, your credit score will also improve along the way.
3. Under use your credit card
Racking up high credit card debts can wreak havoc on your credit rating. If you have a number of credit cards, it would greatly help if you can keep the charges at minimum or below the credit card’s account limit. In simple words, under use your credits and pay your bill in full at the end of each month to boost your credit rating quickly.
4. Keep payments current
If you have late payments, there is no better time than now to make your payments current. Remember that your payment history is a major factor that affects your credit score. If you update your payments for all your payables, chances are high that your credit score will enjoy a quick and easy boost.
5. Check your credit files
Before you forget, make sure that you check your credit files. You can request for your credit report for free once a year. Once you have the report, look for any discrepancies or errors. While it rarely happens, errors can still happen and it can affect your credit score significantly. If you do find any error, report it immediately to respective credit agencies to have it fixed as soon as possible.