20 Jul 5 Things You Can Do To Improve Your Credit Score
Your credit score is an influential factor when it comes to taking out a loan. If you have a high credit score, you are more likely to qualify but a low credit score can leave you high and dry in a time of need.
In this article, we take a look at what you might do to improve your credit score:
5 Things You Can Do To Improve Your Credit Score
As you know, a credit score is a number rating that depicts your “worthiness” of gaining a line of credit. Lenders will take these numbers into account when making a decision and the following are just a few ways to improve this score before a lender sees it.
1.Pay Your Bills on Time (Every-Time)
Most people manage to pay their bills on time and this is an excellent habit from the perspective of a lender. Just so you know, a lender views this consistency as an insight to future performance and late payments are a red flag that damage your credit score.
For this reason, try to make a concerted effort to pay your bills on time in the future. Whether this refers to loan repayments, telephone bills or utilities; each of these repayments can contribute to your credit score and ability to gain credit in the future.
2.Pull Credit Reports to Identify Any Weaknesses
It might seem like a scary prospect but you simply cannot fix what you do not know about. In other words, if you pull your credit report from TranUnion, Experian or Equifax, you can at least identify what you need to improve in terms of your credit score.
In case you might not know, this report can be pulled once a year and outlines any issues relating to your crest cards, bill payments or even loan enquiries.
3. Pay Off Any Debt and Reduce Credit Card Balances
Credit utilization is something most folk do not know about. As a rule, this number is the combined balance of your credit card balances which is then divided by your credit limit. Simple enough, right? You can find this number using your credit card statements but either way, it’s essential to keep this ratio below 30% at all times. You can pay off debt and reduce your credit card balance to ensure this ratio is kept below 30%.
4. Stop Asking for Loans and Credit
Hard enquiries for loans or credit is also taken into account by your lender. That is to say, checking your credit balance is fine but making an application for a loan will be taken into account when looking for credit elsewhere. Needless to say, any rejection in this regard will be viewed as a negative sign and reason to refuse your request.
5. Keep Old Accounts Open (Delinquent Accounts)
Believe it or not, you can improve your credit rating by keeping old accounts open. You see, having more than one or two accounts will be used during the credit utilization calculation and hence, reduce the ratio. Either way, you have nothing to lose and there is no downside or penalty to having delinquent accounts to your name.
It can take many years to rebuild your credit score but the above steps are sure ways of improving this score over time. In terms of specific time-frames, this means you can potentially improve your credit score within just a matter of weeks and months. At the same time, there is no quick fix for a credit score and the best way to build an impressive score is to deploy efficient payments, positive cash flow and good habits. To learn more about your credit score and the role it plays in qualifying for a home loan, contact a salary-based loan officer at City Creek Mortgage today.