Having a good credit score should always be your aim as it offers a whole host of benefits and opportunities if you have ticks in all the right boxes.
If you have suffered a few credit setbacks or just want to be offered the best loan rates and be accepted here are some of the ways you can help send your credit score higher.
Impress lenders with your payment performance
An obvious but important strategy to work on is to ensure that you pay all your bills on time, as late or non-payment issues can make your score take a nosedive in no time at all.
If you take out small loans to build credit and boost your score that is a worthwhile tactic to demonstrate to anyone who views your credit history that you can handle debt responsibly.
Although the inner workings of how your credit score is calculated is a closely guarded commercial secret amongst the main credit bureau’s, and they all have slightly different ways of analyzing the data, it is estimated that about a third of your score is weighted around payment performance.
Therefore, a great way of getting noticed in a good way would be to work hard at paying all your bills by the due date so that lenders can report that you are keeping up to date and can be relied upon to pay the money back.
Reduce your overall indebtedness
Another significant factor that you need to be aware of is that your credit score will reflect how much of your available credit you are using.
If your credit card balances are near to the agreed limit and you have an overdraft with the bank it will say to lenders that you are fully committed and less suitable for additional borrowing.
Paying down balances and freeing up the amount of available credit is a good way of boosting your credit score.
Check the information on your credit report
Unfortunately, mistakes on your credit file can and do happen from time to time.
It is advisable that you check your report on a regular basis and set up an alert with one of the bureaus so that you get a notification when something changes that results in an adjustment to your score.
Checking your file and challenging any incorrect information is a quick and efficient way of improving your credit score, especially if you find something detrimental that is wrong.
Spread it around
Another issue that can influence your credit score is when you have too much debt of one type.
What this means is that if you owe most of your debt on credit cards that is not considered a positive balance of the debt.
There is a various distinct category of debt, such as mortgage loans, store, and bank credit cards, bank and vehicle or student loans. The general consensus is that having a mix of credit types tends to be viewed as less risky because you have experience of varying types of debt.
Your mortgage loan should be the prominent debt rather than credit card borrowing. See how your spread of debt looks and work out of you can balance things out to improve your score.
A good credit score can be the passport to better borrowing options so take a look at ways to improve the way lenders are looking at you when deciding if you are a suitable applicant.