Your credit score is a way for others to see how you handle debt. It shows them if you pay your debt off on time and if you are responsible. They essentially want to know what kind of risk you will be to their company. So, the lower your credit rating, the higher risk you are. Your score can affect your finances in a number of ways. Your score can directly affect many decisions that are associated with your financial situation. Many people are surprised to see just how much a score can impact different situations in their life. If your score is lower than it should be, here are tips to raising your credit score.
Here are six tips for raising your credit score
Pay bills on time
Don’t apply for new credit cards
Pay all new accounts responsibly
Get and review your credit score report
Hire a professional
Tips for raising your credit score:
Pay your bills as soon as you get them
It is very important to pay your bills on time!!If you are looking for a company to lend to you then they will want to make sure that you pay your bills on time. No lender wants to lend someone money who can’t ever seem to pay their bills, it poses too much of a risk. If your credit score is low and it shows you are consistently late with payments, companies are less likely going lend to you. The higher the risk you pose, the higher those interest payments are going to be. The quicker you pay your bills the higher your credit score will become.
Reduce your debt
By reducing your debt, lenders will see that you can afford another bill every month. If you have a lot of debt then they think that you will less likely be able to add on another expense. Reducing debt is a great way to raise your credit score. Also, if you are borrowing up to the full amount of your credit limits then that also hurts your credit. Reducing those balances will also help increase your credit score. Some people also think that continually switching their debt to 0% interest rated cards will help their credit, and in reality it hurts it. Continually switching to lower interest rated accounts and never paying off the debt just show that you cannot pay your debt off.
Don’t apply for new credit cards or accounts
Just applying for new credit cards and accounts can affect your credit score quite a bit. This will give something else for lenders to look at and checking your credit score repeatedly can easily lower it. Again, lenders will look at this and wonder if you are going to be able to pay all your bills on time. Just sticking with current credit cards and not applying and opening new ones will help increase your credit score over time.
Pay any new accounts responsibly
Make sure if you do need to open a new account to pay it of quickly and responsibly. The faster you can pay your account off, the quicker your credit score will raise. This shows that you are responsible and this will only help your business with other companies in the future. It’s also important to make sure you don’t open multiple accounts in a short amount of time. Doing this will hurt your credit score.
Review your credit score
Get and review your credit score report. It is important to know where your score is at and to make sure there aren’t any mistakes that have been made that will negatively affect your credit score.
Hire someone to help you raise your credit score
There are professional companies that are trained to help you with your credit score. Most of those companies are referred to as credit counseling companies. These companies can create a budget you can stick to. They can help you can’t work out repayment plans with your creditors, and they can also help pay off and keep track of your endless bills.
How long will it take to improve your credit score?
The negative situations will affect your credit score much faster than the positive situations. Any late payments can negatively affect your score in just a few months, but paying any bills on time may take anywhere from six to twelve months to show significant improvement in your credit score.
Raising your credit score is obviously very important to your personal finances and is vital to keep control of it. Your credit score can affect everything from loans and credit cards, to your ability to find work and housing. Raising your credit score should be the main focus of your financial planning, and you should always try to keep on top of your debt. Following these tips for raising your credit score will make your life a lot happier and it will be a lot easier when it comes time to get a home, a job or even a credit card.