It’s been a difficult time for everyone. But coming into the new year, many have found the past twelve months have landed them with lower credit scores than ever before. This can damage not only your financial reputation, but also your prospects. So, what’s the effect of a high or low credit score, and how can you improve yours?
Why Is a Good Credit Score Important?
It’s like a digital record of financial viability, which is reflected in a credit score. Purchases made using credit cards and monthly debt repayments boost your score. A low credit score makes borrowing money, securing credit cards with good interest rates, or qualifying for a mortgage difficult. Conversely, maintaining a good credit score can:
- Increase loan amounts available
- Lower interest rates on loans
- Increase the probability of loan acceptance
- Provide access to buy now, pay later credit offers
Boosting Your Score Is Easy
Knowing everything about your credit score is important. So, you must check it whenever possible to see where you can give it a boost. Let’s discuss eight easy ways to improve your credit score In 2021.
#1 – Know Your Score with a Free Credit Report
To improve your credit score, you need to know what it is. There’s plenty of companies out there that can give you a free credit report card, such as TransUnion, Equifax, and Experian. Most of these provide paid services to keep on top of changes. If you have the spare income to subscribe, it can significantly help your credit score. Keep reading to find out how.
With companies like Experian, you are entitled to one report free annually. And you may even be eligible for another if you’ve recently been refused a loan or employment based on a poor credit score.
#2 – Check If Your Report Is Accurate
Identity theft and credit fraud are rife these days. Once you have your report, take the time to review your accounts and dispute any you know aren’t right. Even if you don’t get lost money back, having false debts removed from your credit report can boost your score.
#3 – Pay Your Bills on Time
Perhaps the most frequent cause of lowered credit scores is late payments. To give your credit a boost, make sure to pay any bills and loan repayments on time. Using direct debits is a reliable way to make sure payments reach their destinations on time. And monthly reminders on your phone or work computer can help if you’d rather not automate your payments.
#4 – Open a Secured Credit Card
The main benefit to get this card is that you’re more than likely to get approved if you don’t have stellar credit. You’ll need to make a deposit upfront. And they often don’t require a credit check to apply. Another huge benefit is you’re going to build your credit just like any normal credit card would, if the issuer reports to the credit bureaus. When choosing any credit card to help boost your credit, make sure they report to the bureaus before applying.
#5 – Get a Credit-Builder Loan
To get a credit-builder loan, you don’t need to have a good credit score. You just need to prove that you have enough income to make the payments.
You regularly can’t get to the cash until you have completely reimbursed the advance, which implies you can work on your savings and your credit simultaneously.
#6 – Check Your Credit Report for Errors
The first thing to do is to look at your Credit Report. Second, You can get one from each of the major bureaus. You’re entitled to a free copy every 12 months. Once you receive these, pay detailed attention to any errors such as an incorrect address, the spelling of your name, open accounts being reported as closed, outdated information, and many more. Check here for more information.
#7 – Get a Credit Card, and Request More Credit
Spending credit is the best way to earn better credit. So, look for a credit card that fits your needs. You can use it for predictable expenses you can pay off as soon as you get paid. Simply using the card and paying it off at the start of every month shows you can use credit responsibly, which should allow you to request more credit to use and improve your debt ratio, which also affects your credit score. These things can help boost your credits score effortlessly.
#8 – Patience Is a virtue
Repairing your credit score won’t be fast or without hurdles. Take your time to think through all your financial choices, limit your access to new credit avenues unless they fit into your overall credit goals, and keep on top of payments. It may take months for the results to show, but once they do, it’ll be worth it. Hang in there!
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