You checked your credit score, and you’re not too happy with the results. Now, you’re feeling anxious about how the low score is impacting your personal finances, and how it will impact your finances in the future.
You don’t have to feel resigned to your less-than-stellar results. It’s possible to bring those numbers up. Try these simple changes to climb up the ranks.
Go to Credit Counselling
If you need to get your score in better shape, the best thing that you can do is go to an expert for help. A licensed insolvency trustee can give you credit counselling, showing you which credit habits are holding you back and which ones can push you towards your goals. Professional credit counselling encourages clients to learn better habits and gain financial freedom for the long-term. It’s more than a quick fix.
Pay Your Bills on Time
Paying your bills late will do more than tack on late fees — it will damage your credit score. That’s why you should make an effort to pay off your bills on their deadlines. Or even better, you should deal with them before the deadlines. Being punctual and consistent about your payments will work out in your favour.
Pay Down Your Balance
Maintaining a high credit card balance is a simple way that people hurt their credit score without even knowing it. Experts recommend that you should try to keep your balance as low as possible to prove that you’re still using credit, but you do not depend on it.
Don’t Ignore Your Credit
When you find out that you have a low score, you’ll be tempted to give your credit card a time-out. But don’t do it. Ignoring your credit is one of the quickest ways to harm your credit score — this is because you have to use your credit to move up in the ranks. Strategies like locking away your credit card or closing an account will backfire.
Don’t Make New Requests
Your credit score is calculated by certain factors, like payment history and credit utilization. One of the other factors is the “inquiry” factor. The more credit checks taken out on you, the lower your score drops. So, be careful about applying for additional loans or credit cards.
Check for Errors
When you spot an error, contact the credit agency. It could be something as small as listing a loan as unpaid when you know for a fact that you finished paying it off. A correction could give your score a significant boost.
A lot of strange errors in your credit report is a sign that you are a victim of identity theft and identity fraud. If you see extra accounts and loans that you didn’t open, you need to call your bank. The crime will hurt your credit score, but if you catch it early, you can minimize the damage.
Your credit score isn’t set in stone. You have the power to change it. By following all of these smart and savvy tips, you can climb into a better credit category and leave your old score behind you.