A bad credit score dramatically impacts your life. It affects how you get approved for a loan. Getting a higher credit score is important and it means you are more likely to be able to borrow money at the best interest rates. Here we discuss how to improve your credit score.
Do You Have Bad Credit?
A poor credit score makes life difficult. If you need money for a new car, or you need to fix your roof, you find it tough to get a loan with bad credit. Improving your credit score is a must. If your credit score is low, you could look at the best bad credit loans to help you out of a sticky situation. Or bad credit home equity loans could help. Alternatively, try the following tactics to improve a bad credit score fast.
How to Improve Your Credit Score
Check Your Credit Report Online
Checking your credit score is vital, even if you do not want to get a loan right now. Your credit report tells you how likely you are to get approved for a loan. If your credit report looks good, you’ll have few problems securing credit. But if the outlook is poor, you may struggle. Get a clear picture by checking your results. In some cases, the wrong information on a credit report might be affecting how lenders see you. Regularly review your report (you can do it easily online) to spot any errors and correct them.
Close Your Unused Credit Cards
Lots of credit cards, even if you are not using them, is a red flag for lenders as it shows you cannot properly control your finances. Lenders do not like you to have access to a lot of credit. If you have plenty of credit cards, close most of them. It is a good idea to keep one or two cards open and spend a little on them each month which you fully pay off. This can help to raise your credit score as it shows you are responsible with debt.
Pay All Your Bills On Time
Make sure you pay every bill in full, on time. Missed payments result in a critical red mark on a credit report and it immediately lowers your score. It demonstrates to lenders that you cannot reliably handle your finances. Arrange all your direct debits for just after pay day so you know you will have the money to deal with them. If you are struggling, get help with bills from the government or set up a comprehensive budgeting plan and stick to it.
Improve Your Finances
It may not seem possible right now, but you can improve your finances over time and be in a much stronger position. Small changes make a significant difference in the long run. For example, make a little more money each month by taking on extra work, a second job, or by selling your unwanted items. Spend a little less each month by switching utility providers, changing to a cheaper car, or just going out less, and you will quickly see your actions take effect on your bank balance and your credit score.