Your ability of acquiring an auto loan, a credit card or a home loan can certainly be affected if you have a low credit score. Often, you even need to have a good credit score in order to secure an excellent job. So, if you have a poor credit score, then these are the reasons you might want to learn how to improve credit score. In fact, you should be more interested in boosting your credit score as quickly as possible if you plan to finance some item in the coming future. Lucky for you, there are several ways in which you can raise your FICO score and become eligible to borrow loans.
1. Paying your bills on time:
If you are in search of a way to increase your credit score, then the first thing, you should do is start paying your bills on time. If you have been underestimating the importance you paying your bills in a timely manner, then you made a huge mistake. Whether or not you have been paying your bills in the past is the first thing most finance lenders want to know. This is the reason that your credit history governs almost 35% of your credit score. Your credit score is severely damaged when you do not make mandatory payments. So, you will have to start paying your bills on time immediately, if you want your score to start rising in the next month.
2. Maintaining your credit card balances:
Your credit score will also be lowered if you have high outstanding debt. Your credit score will lower by almost 70 points if you max out your credit cards. Rather than maxing out a single card, you should try keeping you credit-card balances below 25% of your limits by transferring the balance to several other cards. So, if possible do your best to pay off all your debt because this will significantly increase your credit score. Credit Repair Ease makes it easy for household owners and business owners to fix bad credit score with our smart & unique credit repair process.
3. Not closing paid-off accounts:
Your total available credit will reduce if you close old accounts and as a result of this your utilization ratio will also change. This will also lower your score as well. Your credit history will also be shortened if you shut down your oldest credit accounts and this will also reduce the worth your credit, causing your score to drop.
4. Borrowing a small loan:
Establishing a credit history is quite important for you if you want to be eligible for bigger loans in the future. If you have no credit history at all, and you do not prefer to use credit cards, then you can begin increasing your credit score by borrowing small debt. You can’t show lenders you are a good borrower until you actually borrow some debt. If you pay your bills on time, your credit score will continue to rise steadily, and lenders willingly offer you bigger loans later.
While there are many other ways to increase your credit score, but if you wanted to know how to improve credit score quickly, then you should focus on these four methods.
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Helpful Information and Resources
In addition to those available on this site, there are other related consumer information resources to help you become educated and make more informed decisions regarding the management of your personal finances:
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