If you wish to boost your credit score, it won’t happen overnight. Credit scores take into consideration years of preceding behavior which you can find on your credit report, and not just your latest financial report. For reference purpose, credit providers view your credit score to quantify the risk in approving you as a client before they accept or drop your application for credit or for an increase in the credit limit provided.
Whether you have a good credit history or a bad one which needs to be worked upon from scratch, most of us have some room for improvement. There’s no fast lane to improve your credit score, but disciplined financial habits can go a long way toward enhancing your credit health. On that note, we’ve put together the most important factors that will guide you to improve your credit score over-time.
Pay your bills on time
What lender will care about the most is your likelihood of paying your debts on time without any defaults. Doing so all the time, on time, proves that you are consistent with your repayments and that you’re reliable which will help to boost your credit score. That’s why it is important to make all your payments on time, not just your credit card repayments but all other bills, rents and utilities. A little delay in payments can hamper your credit score. If you find it hard to remember or to keep a track of your bills and due dates, consider automating or setting payment reminders.
Eliminate any credit card balances
A good way to maintain a healthy credit score is by eliminating any unnecessary balances. Those are the small balances that pile up and hamper and show up on your credit balances. One of the reasons why this strategy works is because lenders verify and consider your credit scores basis how many credit cards you own and how many have balances in them. The solution to improve this gap is by gathering all those credit cards with little balances, paying them off and keeping only one or two credit cards for regular purpose.
Regularly review your credit report
Regularly monitoring your credit report is a healthy practice that will prevent anything to go wrong. Credit report agencies offer consumers a free credit report on annual basis. With the help of such services, you can identify any unusual applications on your report and can escalate the same, just in case. If your credit application has been declined or been put on hold, you can always seek for a credit report within 90 days of your application, this helps in cross-verifying things, for our peace of mind.
Avoid multiple account applications or enquiry activity
Another factor that’s taken into consideration is the number of times you have submitted an application for new account opening and the number of accounts you have opened in a short span of time. In order to avoid getting noticed for this, try not to shop too much for credit at the same time. Multiple applications submitted simultaneously could strongly indicate a significant change in your financial situation.
Showing that you are a reliable borrower who can repay on time and stay within the credit limit will help in convincing the lenders. One solution to this is to take out a credit card precisely designed to build or rather rebuild your credit history.