Does your credit need a boost? Learn how to improve your credit score with these 4 simple tips.
First off, it’s really quite safe to say that not everybody knows what a credit score is, even the folks that apply for loans. Well, this is the three-digit number that lenders use to determine how likely it is for you, the borrower, to repay the loans on time, or at all.
Simply put, this is a crucial factor in your financial life. It’s a score you must hold with high regard and try to make sure you don’t damage under any circumstances. Also, the higher your credit score is, the more likely you are to qualify for bigger, better loans at excellent rates. It’s one of the best ways to save you money long term and build wealth. Think about it, the loan you get at a great rate can be invested in real estate or even your own business venture.
At this moment, your credit score might not be the best. If that’s the case, know that you are not alone.
You also need to realize that improving your credit score takes time. And the sooner you start addressing this issue, the faster your credit score with go up. Luckily, there are numerous steps you can take to boost your credit score in 2019.
Here are a few that you might want to consider:
Lenders are always interested in knowing how reliable you are on paying your bills. This is among the first thing lenders look at before deciding whether to approve your loan request or not. Therefore, you want to ensure that you have a good track record when it comes to your payment performance. Lenders consider your current bill payment records to be the best predictor for your future loan repayment performance.
Your income has nothing to do with your credit score. Also, you can’t go back in time and reverse that costly trip your put on your credit card. But one thing you can absolutely control today, is paying your bills on time. There are a number of budgeting apps out there to help you track your upcoming expenses, including credit card payments.
The negative impact of a late payment on your credit score declines over time. Therefore, the older, late payments tend to have less effect compared to your most recent ones.
It’s no secret that anyone can find themselves in some financial bind. Even super-rich folks have found themselves caught in this web at some point in their lives. You never know. Layoffs and health emergencies happen. These events can cause you to be strapped for cash and late on paying your credit card. If this is the case, try to keep the late payments to a maximum of 30 days.
Even lenders know that the payment schedules of borrowers can sometimes be disrupted. And because of that, most lenders and creditors don’t usually report late payments to the credit reporting agencies as long as they don’t surpass 30 days.
However, if you are more than 60 days late, that might be another story. Therefore, don’t start stressing if you miss your payments by a couple of days. Also, it’s a good idea to contact your lender and notify them of the reason for the late payment, just to be safe.
Your payment history accounts for 35 percent of your overall credit score. Therefore, the more payments you make on time, the better it will reflect on your credit score. If you want to keep that momentum going, then you can set up automatic payments with your lenders and creditors. Also, ask for the bill payment deadline alerts via text or email. This will be especially helpful if you have trouble keeping track of your bill payment deadlines.
I’ll be the first to admit that between school deadlines and work deadlines, it’s hard to keep track of it all. Netflix, Amazon and other subscription service payments only add to the calendar full of payment deadlines. Simplify your life with automatic payments and payment deadlines alerts.
It is also essential to always check your credit reports carefully. There’s a chance that doing this can boost your credit score. How? Well, it is common to find mistakes in your credit reports from the lenders and banks. You must, therefore, be careful and thorough when reviewing your credit reports.
You might spot accounts that you don’t recognize. You may also notice late payment dates that don’t match up. You need to make sure that all these details are recorded correctly. Do not be afraid to confront your lenders or banks for details.
I know, getting on the phone with a bank and getting transferred from department to department can be frustrating and time consuming. However, investing the time to clear up an issue on your credit report can lead to a boost in your credit score. That simple phone call could be what boosts your credit score by several points.
Don’t be the person who ends up with a severely damaged credit report due to your own negligence. Remember, ignorance isn’t innocence. You will be held accountable for the errors on your credit report if you do not take the time to correct them yourself.
These lenders and bank managers are also human and are bound to make mistakes from time to time. Therefore, it’s up to you to protect yourself from suffering due to any of these mistakes.
A Final Word of Encouragement
A good credit score can open countless doors for you. It can qualify you for some of the best loan terms and interest rates. This can be that stepping stone you need to invest in your own business. In some instances, you’ll even find landlords who consider your credit score when you apply for housing. While you can’t go back in time to reverse a missed payment or the balance your put on a credit card, there are actions you can take today to boost your credit score. Be empowered by setting up automatic payments and regularly reviewing your credit report. Remember federal law makes it possible for you to get a free copy of your credit report from the three major credit reporting agencies.
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