This is a contributed post and do not necessarily reflect the opinions of Meet The Harris Family.
Having a good credit score is important for a number of reasons. Your credit score impacts your ability to take out contracts such as mobile phone contracts and catalog agreements. Other factors impacted are eligibility for credit cards, mortgages, and other types of loans. If you have a negative credit rating, it can really hold you back in life. This is why it is important to take the steps to rectify your bad credit score. Read on to discover some top tips for doing so.
Make your payments on-time
There is only one place to begin, and this is by making your payments on time. If you miss a payment for any reason, it is going to show on your credit report for six years. This means it could prevent you from lending money over this period of time, which can really hold you back in life. Paying your credit cards and loans on-time is the number one rule when it comes to improving your credit score.
Make sure your personal information is up-to-date
If your personal information is not up-to-date, lenders will not be able to verify who you are. This simple task can have a negative impact on your rating. Entering new financial information could result in an increase of your credit limit. You’re actually improving your score now due to having a better income to debt ratio.
Allow your credit accounts to mature
Once you have paid off a credit card, the logical move would seem to be to closing the account down. However, this is not advised, as it will reduce the average age of your accounts. Instead, if you keep your accounts open, you allow them to mature, and this will have a positive impact on your credit rating. If your accounts are over 33 months old on average, your score will improve. Of course, if you are going to be tempted to use your credit card and get yourself in debt again, you should close the account.
Apply for a credit card
Applying for a credit card may seem like a counterproductive solution, but it can actually be beneficial. There are a lot of people that have bad credit scores because they never had a credit card before. When there is no information for lenders to judge their decision on, you will struggle to have anything above a fair rating on your account. This is why it is a good idea to look into securing your first credit card (if you have never had one before), so that you can show you can make repayments on-time. This will boost your rating.
Consider a consolidation loan
Debt consolidation loans for bad credit are a good idea because they consolidate your debt into one place, meaning you only need to pay off one lender. This will reduce the number of credit accounts you are using, which can have a positive impact on your score.
From making payments on time to allowing your accounts to mature, there are a number of different ways you can improve your credit score. This is not something that is going to happen overnight. So, follow the advice that has been provided, and keep an eye on your rating to ensure your score is gradually improving over time.
