You know how they say money makes the world go round? It isn’t so much about hard cash anymore. In fact, at present, credit scores are the real drive behind most of the events that can change your life. Therefore, if you want to improve it, it is advisable to have control over your credit and raise your credit score as high as possible.
What Happens If You Do Not Increase Your Credit Score?
For someone with a lower credit score, several negative consequences can occur. What is this about? Well, first of all, not only credit card companies check an individual’s score to determine if they really should receive new credit, but several other companies or businesses also analyse the credit score as a way to determine if they really want or don’t want to have that person as a client.
If, any of the following situations may occur:
- Work denial
- Denial of a lease or rent
- Denial of a home mortgage loan
- Denial of a home equity loan
- Denial of a car loan
- Denial of low interest
- Denial of different types of insurance such as a car for example.
Strategies To Increase Your Credit Score
What can a person do exactly to increase it, so that he can take advantage of being in the category of people with good credit scores? Although there are several steps that can be taken, none of them is sufficient on its own. Additionally, there is no guarantee when it comes to improving your score at high limits. However, a very effective way is by following these strategies to the letter.
It is important to pay off your loans and credit card debts, and it is equally important to continue to use your credit responsibly. If you suddenly stop using your credit, you will lose the advantage you have to increase your score. The question is to maintain a good balance between the level of credit you have open and the amount of debt you have acquired.
In addition, you must also add other mitigating factors such as: the payment history, the length of time of each account in your credit, debt balances that you have and that are carried month to month, and more. Follow as many of the following possible tips to increase your credit score:
- Pay more than the minimum payment. This will lower your level of debt faster to improve your credit level. In addition, it will reduce financial charges, helping you lower your total debt much more quickly.
- Continue using your credit cards, but limit your expenses to the most essential. This strategy will lower your debt level, while you become more responsible for using your credit, that will eventually help you improve your score.
- Refrain from opening new accounts or closing others. This would affect your credit score, typically in a negative way.
- Stop using the credit cards that are charging you higher interest rates, unless you can pay your monthly balance in full. Remember to make additional payments to the balance sheet if you are not paying the balance in full.
- Pay each of your debts on time, such as utility expenses, school fees and loans. If possible, pay bills earlier to avoid the possibility of forgetting and late payment. Even better, make your payments automatically debited so that you never again have to do it manually.
- Monitor your credit score and dispute any false information. Remember that negative information will remain on your credit for seven to ten years depending on what it is.
- Avoid department store credit cards and use a primary credit card for most of your purchases. Large players in credit (MasterCard, Visa, American Express, and Discover) carry more weight.
- Avoid having a debt collection agency on your list of creditors. If you know you owe an account, make the payment before it is delayed or you reach a payment agreement with them.
Follow these tips and you will be able to build up your credit score faster. These will help you in the long run as you grow your credit.