For the Better: 7 Ways to Improve Your Credit Score

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In times of difficulty, a lot of people often lean on loans for financial help. However, some people often get denied a lot because of their credit score. If you’re one of those people who constantly get denied with loan applications, it can get a bit tiring. The most stressful part is you don’t even know why you were denied. 

Keep in mind that the common reason why you were denied is you have a bad credit score or bad credit history. Your credit score will be the basis of your creditworthiness. If you think that having a bad credit score is the end of everything, don’t fret. You can slowly improve your credit score so you can have more options when it comes to loans and other financial matters. With that said, here are some ways to help you improve that credit score. 

Knowing Your Credit Score

Of course, before you fix your credit score, you have to know what are the good and bad credit scores. Basing on FICO or the Fair Isaac Corporation scores, here are the figures to keep in mind:

300 – 579 – Very Poor

580 – 669 –  Fair

670 – 739 – Good
740 – 799 – Very Good

800 – 850 – Exceptional

Keep in mind that with higher scores, the more options are made available. Having higher scores also makes it easier for loans to get approved. If you want help with your credit scores, you can go visit Crediful. 

Ask for a Credit Report

A credit report is a list of transactions regarding your credit history. You can ask for your credit report for free from the Credit Bureau. In the US, we have three credit bureaus; TransUnion, Equifax, and Experian. These companies will record an individual’s past financial transactions, how fast did you pay your debts, and after that, they will make a credit report. 

Although it is good to ask for a credit report, make sure you are doing a soft inquiry rather than a hard inquiry. Most people who opt for a hard inquiry give off signs of uncertainty and for some lenders, might signal an increase in risk. 

Review the Credit Report

Be skeptical. One way to improve your credit score is by reviewing the credit report thoroughly. This is essential because identity theft is common in the US, and you don’t want that to happen. With that in mind, here are the things you need to remember in reviewing your credit report:

• Double-check if the account is yours
• Review the past owed transactions and check if the figure is correct
• Double-check the date and time you pay your debt and ensure that it is recorded correctly
• Check also for duplicate transactions, especially the owed amounts already paid

File a Dispute

After you review your credit report and you find some records that are not correct or inaccurate, then you must file a dispute. This is essential in improving your credit score. If you do not report it to the credit bureau, a piece of negative information will always be in your report that will cause you to be denied again in your future loan applications.

Once you filed a dispute about a particular record, it will have a due process, meaning the company will prove it first that you ordered a specific item or a particular item is not yet paid. If the company cannot prove their billings, then the inaccurate amount owed should be removed from your account. 

Pay Your Bills and Debts Before It Matures

It’s so good and peaceful to sleep at night when you know you’ve already paid your debts and bills on or before the due date. This is another way to improve and keep your credit score on track. Paying bills on or before the due date will give the creditor’s impression that you are a creditworthy consumer. 

The key to not getting overdue is budgeting and time awareness. It’s a good idea to save money for every salary so you can pay your debts and bills on time. Some people will set aside 10% of their salary for whatever purposes it may serve, and they’ll only spend what is left. You should always be aware of when is your due date to avoid missed payments.

Utilize Your Credit Wisely

Once you’ve already paid your debts and corrected the inaccuracies in your account, your credit score is now back on track. But this time, utilize your credit wisely. Only buy things using your credit card when you need it or if it is urgent. It would be best to avoid past reasons as to why you were denied applying for a loan.

It’s also a good idea to charge your credit card once a month even if the item is not that needed. Some people use this technique to keep improving their credit score, but ensure to pay on or before the due date. Some people would also lend their credit cards to their most trusted friends or relatives; this is another way to keep improving your credit score.

Increase Your Credit Limit

This is another option of improving your credit score in a way that when you have an increase in credit limit, you’ll have a lower credit ratio. Keep in mind that the usual credit usage ratio is 30% or below.  Having that said, when you keep it that way, you’re always improving your credit score.

Takeaway

Improving your credit score will not happen overnight, as it requires time and patience. Above are the ways and ideas to improve your credit score. If you follow and practice these steps with commitment, you can accomplish them.