A credit score, a three-digit number that haunts many people in Americans. This number is usually used by many lenders to determine the likelihood of you paying their money back. It sounds simple, but it’s a huge deal of your financial status.
The higher score you have, the more likely that you will be approved for loans or credit cards. You can even a much more promising and favorable terms such as a lower interest rate and others. All of that means that improve credit score equal to live in heaven.
Tips to Improve Your Credit Score
If you have a bad credit score, it’s best to improve it before you take any financial responsibility. With a better credit score, you will have leverage against the lender to get a better deal out of the transaction. But first, check how much your credit score is.
You can check them easily online nowadays. With this, the information about what kind of things that affect your score the most will also be shown. Here are the factors that you can improve.
1. Pay Your Bills on Time
The credit score is greatly affected by how responsible you are in paying your bills. The history of your payment performance can show the lenders of how reliable you are. You can improve credit score automatically by paying your bills on time.
This includes your payment for your house, credit card bills, auto loans, and your student loans. If you’re behind in paying certain things, make sure to pay them as soon as possible.
2. Get Leverage Using Your On-Time Payment
If you’re good paying your cell phone and utility bills, you can show off that to loan lenders. In a free product called Experian Boost, you can improve credit score using the leverage of those payments. To get this, you need to connect Experian to your bank accounts.
This will allow our lenders to see your payment history. This credit report is there to improve the credit score of what you already have.
3. Pay off Your Credit Cards Debt
One of the ways on how credit card calculated is using the credit utilization ratio. It’s the number driven by the amount of credit balances that you have at any given time compared to your total credit limit. If you have a low ratio as low as 30% or less, your loan has a higher chance to get approved by lenders.
This’s a proof that you can manage your credit well. By paying off your credit card debt while keeping the credit balances low, your credit score will get better over time.
By doing those three things alone, you will answer the question of how to improve credit score. Eventually, improving your score will help you to get approved on loans a lot easier. The promising and favorable terms will be on your side if you have a good credit score.
But, we suggest that you better with saving your money instead of getting a loan. With a well thought out saving plan and financial management, you will get what you want a lot faster without having to pay interest rates!