With interest rates skyrocketing, it has become more crucial than ever to know what your credit score says, and if it’s not in the best shape, take the necessary steps as quickly as possible.
A decent credit score can make your financial life a lot breezier as it will help you qualify for a lower rate of interest on almost everything, be it personal loans, student loans, mortgages, credit cards, and so on.
Having lower rates mean lower monthly bills and improved monthly cash flow. The money you will save can be used on anything from adding to your beefing up a college, emergency, and retirement funds or paying for required home improvement or repair projects.
Clearing your higher-interest debts such as unpaid credit card bills will eventually improve your credit score. However, one of the best and hardest things is to know where to start.
Mentioned below are some tips and tricks that can help you kick-start the process of improving your credit score. Read on to know.
1. Keep your credit usage low:
Are you scared of the term “credit utilization”? Don’t let this term overpower you! This financial term is not that difficult to comprehend. Keeping credit utilization low and in check is the quickest way to improve your credit score. Credit utilization generally stands for how much credit you are utilizing compared to the total credit limit. Optimally, you must aim to keep your credit as low as possible.
2. Be an authorized user:
Another trick to improve your credit score is to become an authorized user on your mate or loved one’s account. This trick can be exceptionally beneficial if you fail to increase your credit limit and you have someone who is comfortable with you becoming an authorized user of their credit card.
The only drawback is that you will face the “you will also be responsible for clearing the dues” line by your card partner. If the primary account user doesn’t fail to pay, it will reflect on your credit report as well. Not everyone allows adding an authorized user, though.
3. Pay your bills on time:
Clearing dues on time plays a great role in making and breaking your credit score. Just one missed or late payment can impact your credit report for up to seven-year. Hence, do whatever it takes, but ensure to pay bills on time. If you are bad at keeping dates, sign up for automatic payments.
4. Check your credit report:
A single error on your credit report could hinder the growth of your credit score. Thus, fixing it quickly can increase your credit score more than you have ever anticipated. Fortunately, there are many ways to check your credit for free. Once you have your credit reports, look for errors. Precisely check the below-mentioned information of each account:
- Name
- Address
- Social Security number
- Employment history
In case you notice any error, raise the credit report error immediately.
5. Do not close your old accounts:
Do you know how effective your employment history is on your resume? Similarly, your old credit accounts can display whether you are reliable or not. Also, your credit history impacts approx 15% of your credit score.
As you will be lessening your total available credit, shutting down your old accounts can increase your credit utilization rate, lowering your credit score. So, keep your old accounts open!
Wrapping Up:
We comprehend that improving your credit score is not that simple; however, it is not even impossible! If you are just starting to develop your credit or trying to re-build the same, it can be considered a gradual process. But with the above-mentioned tips, patience, and focus, you will be heading toward a higher credit score.
If you still can’t improve your credit score, feel free to get in touch with us today. At First Fruit Financial Services, our team is always ready to help!