There’s no denying the importance of having a good credit score. A good score makes getting loans, credit cards, mortgages, mobile phone contracts, and so many more important financial contracts that much more of a reality.
The better your rating is, the higher the chances are of you finally getting accepted for a specific amount of credit at the best possible rate. This goes for just about every type of credit card out there, including the LoveSac credit card.
If you are looking for ways to improve your credit score, you’ve come to the right place! In this article, we have compiled a list of our top advice to help you get your credit score where it needs to be.
Make Regular Payments On Time
This one may be a little bit obvious, but ensuring that you regularly make all payments for various bills in full and on time can show a lender that you are a reliable borrower. It also shows that you are more than capable of handling different types of credit easily and responsibly.
Keep Your Address Up-To-Date
Making sure that your current address is accurate on your credit report is crucial. If you move home, you must ensure you register on the electoral roll at your new address as soon as you possibly can.
Even if you are living at home with your parents or are living in any type of shared accommodation, make sure you register to vote!
Try To Avoid Moving House
If you can, we’d recommend that you avoid moving house regularly. This is because lenders like to see that you have stability in your personal circumstances. Frequent movies may lead lenders to think that you’re struggling to cover rent or mortgage payments, for instance.
Scan For Mistakes
Even the smallest mistakes on your credit report could make a huge difference in your score! This might even be enough for a lender to refuse to give you credit, which is the worst-case scenario.
Try to check your credit report every couple of weeks so that the information is up-to-date and accurate. If you manage to spot a mistake, directly contact the provider and request a change.
Keep Your Credit Card Utilization Low
This is the percentage of your credit card limit that you use in a specific period.
If you have a limit of $500 per month and you use $250 of it, your credit card utilization will be 50%. Lenders tend to look favorably at lower percentages. This will also help you to get a higher credit score.
If you’re planning to work on improving your credit score, aim to keep your credit utilization less than 30% if possible. If you need more credit each month or want to improve your credit utilization ratio, ask for an increase in your credit limit.
Limit Requests for New Credit
There are two variations of inquiries that are carried out into your credit history. These are commonly known as soft or hard inquiries.
A soft inquiry will generally not have any impact on your credit score. It allows creditors to review your credit score and report to get a sense of just how well you are managing your credit. It might even involve combing through your credit score yourself.
A hard inquiry into your credit score can impact your score anywhere from a couple of months to years. When a company or loan requests to review your credit report as part of a loan application process, this is recorded as a hard search or inquiry.
Keep Old Accounts Open
The older all of your current accounts are, the better it will be! If you have old credit accounts and are no longer using them, do not close them.
Closing any type of credit card while you have a balance on other cards will lower your available credit and then increase the ratio of credit utilization, which may negatively impact your score.
Consider Debt Consolidation
If you have multiple outstanding debts, it may be in your best interest to take out a debt consolidation loan from a traditional bank. You’ll then just have one payment to have to cope with, putting you in a good position to pay your debt much faster.
Summary
These are a couple of key ways you can help to improve your credit score. It may take a couple of months or years to get to a good place but the effort will be more than worth it in the long run!
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