Your credit rating or score is a number which determines your credit-worthiness or risk for lenders. This also determines how far your credit will go when applying for services like Mortgages, Loans, Car Finance, Credit Cards, and Mobile Phone Contracts. You should monitor your credit score and make sure it increases because it will greatly affect your ability to get credit with companies in your future.
If you have got a poor credit rating, you should immediately take steps to improve it. If you have got an excellent rating, chances of getting a good loan with attractive interest rates are much higher. We have listed below some great tips that will help improve your credit rating:
Be aware of your score.
The first step is to find out where you stand by being aware of your credit rating and your history. The most important step to moving forward is to know what your credit status is and why it is the way it is. You can do this for free, online at a number of websites.
Look your credit report over thoroughly.
Make a list of anything you think may be incorrect, and you will be able to see where your credit rating may have dropped, as a result of charges not made by you. Be thorough and go through everything in detail. For instance, a phone company may have listed an overdue payment, but you never recall being late with the bill.
Follow up anything you are unsure about.
In the example above, call the phone company and find out why they have listed as a discrepancy on your credit file. Take the list of what you are unsure about, and follow each item up with the company in question. If it is incorrect then you should be able to dispute it. In that case too, you should request that it be taken off your file as soon as possible.
Learn from your mistakes.
Now that you know what can give you bad credit, the next step is to make sure that this doesn’t happen anymore. If you have a tendency to get cash loans and don’t pay them back on time, resist getting them if you can’t afford them. Knowing your limits, in terms of making repayments, will not only make your credit status better but will also teach you to live within your means.
Improve your credit rating fast.
This is how credit works – your credit rating is based on your spending habits versus your ability to repay. So the key is to use credit as much as possible, but always make sure you can make the repayments. Eventually, the more you have used credit and paid it back on time, the better your credit rating will be.
Although it’s easy to see why so many people want to improve their credit rating, many people are still intimidated by the process. Hopefully, after reading this article you now realize that it is relatively easy to improve a person’s credit score, it just takes time and determination.