The plain truth is that you’re not going to raise your credit score overnight. Your credit score is rated after several years of financial behavior and not just the past few months. However, this does not mean you can’t get started right away. There are several ways you can start to raise your credit score.
So how is a credit score arrived at?
Information held in your credit report is usually used to create a credit score. The exact score might vary from one lender to another as they usually use different criteria to assess potential customers. This will then help them determine whether to lend you, how much to borrow and the interest they will charge you. This is why a credit score is so important if you will ever need a loan.
However, this does not mean you cannot get a loan even with a bad credit score. There are few financial institutions that offer loans to people with poor credit ratings. However, such companies will still need to see your credit ratings to see if you’re making any meaningful progress. There are instances where you will need urgent cash and a loan is your only option. If you have a poor rating, there are a few online companies that can offer you a loan. You will need to inquire on the minimum credit score and if there is a need for a personal property as a collateral. You can read more on OneMain loans reviews which offers loans to individuals with bad credit ratings.
Here are the simple ways you can improve your credit score
- Review your credit report
Each of the three reporting agencies offers one free credit report a year. Go ahead and request for the report. There are no implications on your score for requesting a report. This is one of the best ways to easily notice any anomalies on your report and ask for a correction. Notifying the agency of any errors will help them make necessary changes that can easily improve your score.
- Pay bills on time by setting up reminders
One of the main reasons why people have a bad credit score is not because they don’t pay their loans but simply because they miss on dates. You need to have a calendar planner where every bill is written so that you’re constantly reminded. Paying your bills on time can easily help increase your credit score.
- Pay more than once in a billing cycle
Most loan repayment or bills are usually done once a month. However, you can break from that cycle and pay your bills twice every week to grow your credit rating. Your credit utilization will be lowered and your score improves automatically. There is also the benefit of having to pay lower interest rates when your repayments are done early.
- Communicate with your creditors
If you think you’re going to miss a payment, make sure you talk to your creditors and notify them. You can then set up a payment plan that is affordable to avoid penalties. This will greatly help address the negative effects of late payment and high outstanding balances.
- Make sure you old credit card accounts are not closed
Your credit rating is charged from the history of your credit card. Closing your old credit cards means you’re closing on all the good history and starting something new. If you have to close some accounts, go right ahead and make sure you close the new ones.
- Take caution when paying old debts
Do you have debts that have been charged off? A charged debt means the creditor does not expect any form of payment. Making a payment on a charged off account reactivates the account and lowers your credit rating right away. This is usually the case when a collection agency is involved.
- Make your accounts diverse
Ten percent of your credit rating is only dependent on auto loans, mortgage, credit cards and student loans. However, when you add another account, your credit ratings improve right away. However, you still have to ensure payments are done on-time.
- Shop for a quick loan
If there are no better ways to improve your credit rating fast. Go ahead and shop for quick loans. Quick loans are typically small loans ranging from $1000 t0 $2, 500. You can then go ahead and pay these loans on time helping create a good repayment history.
There are just so many ways to improve your credit ratings and increase your chances of being approved for a higher loan faster. Start applying these simple tips today to see your credit ratings improve