13 Ways to Improve My Credit Rating: Credit is something that is so important in today’s world. If you want to basically do anything beyond work and pay rent, you need credit. Unfortunately, intentionally or unintentionally, many people fall into the trap of credit card debt, defaulted payments and a plummeting credit score. If you’ve googled “how to improve my credit rating” too many times, keep reading. It’s time to get started. Here are some definite ways to improve your credit rating.
What are the benefits of a good credit score?
A healthy credit score does a lot to help make your life easier. Here are some of the big advantages:
- Lower interest rates
- Higher credit limits
- Access to more offers:
- Better loans
- Higher quality credit cards
- Mortgages (with better interest rates)
Ways to improve my credit rating:
- Low credit utilization – Ideally, you want your credit utilization no more than 30% of your maximum credit. Anything higher starts to tank your credit score. Basically if you have 4 maxed out credit cards, creditors will be very wary about giving you another credit card.
- Eliminate your balances – This is even better. If you want to really improve your score, bring your credit card balance down to zero.
- Pay your bills on time – Paying your bills on time shows that you can reliably handle your credit card debt without skipping payments and beginning to get behind.
- Be consistent – This means keep your expenses consistent. Try not to vary too much as it can hurt your credit rating.
- Age those accounts – Credit card companies and lenders like to see a history. A history tells them a story of how consistent you are over the long haul with handling credit.
Additional things that can hurt your score
- See if there are errors on your account – Make sure that your account is accurate. Having other people’s information (especially if they have bad credit) is a definite way to kill your credit rating.
- Check for fraud – If someone manages to hack your credit card account, it can ruin your score big time. Make sure that your accounts are secure. If your account is compromised, take steps to fix it right away. One of the better ways to do this is to consider professional help from someone like Lexington Law or LifeLock.
- Check if you’re linked to someone else – This is a big one. I remember one time my mother had her credit score run for a purchase and it was very low. Way lower than it should have been. Apparently, someone with a very similar name was tied to her accounts, and this person had decades of terrible credit. Make sure you are the only one on your account!
Other methods of improving your score
- Consider a credit builder card – These are known as “secured credit cards”. They are great methods of repairing your credit score or something to consider if you have no credit history. Some of them require a small deposit which will typically be your credit limit. As you prove yourself as a reliable user of credit, the limit will increase. If you want to learn more about this, check out this site. They have numerous secured credit card options that will help you make the best decision.
- Limit credit applications – Who hasn’t been asked “would you like to open a store credit card and save 10%?” Sure, that seems good but really, it can hurt you. Every time you open a new credit card, it hurts your credit rating. When you open a new credit card, it counts as a hard inquiry which impacts your credit score for a full year! Most hard inquiries can drop your credit score 5-10 points. This is important if your credit score is already shaky. Even worse, if you apply for the card and you are turned down the hard inquiry still effects your rating!
- Debt consolidation loans – This is an avenue to consider if you are paying a very high interest rate from your credit cards. Debt consolidation loans allow you to refinance your credit card debt to a lower interest rate, which saves you tons of money and lets you pay down your debt much easier. The one thing you want to look into before signing on with one of these programs is their fee structure. Specifically, you want to know if you will be penalized for paying back the loan early. If this is something you want to look into, check out: The Loan Exchange and Bad Credit Loans.
13 Ways to Improve My Credit Rating: Conclusion
Credit is so important in today’s world. From renting an apartment, to buying a car and even to buying a house – your credit follows you! It’s best to make sure that credit is on your side when you do this. Living a life with bad credit is a surefire way to increased stress, relationship issues, and health problems. Don’t fall into this trap! No item at a store is worth paying 20% interest on! Embrace the good credit lifestyle and you will save money, decrease your stress and live a more fulfilling life.
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