Good credit is an important and necessary part of your everyday life. From getting a car or home loan to shopping for insurance, you need to have good credit. Here are some ways you can improve your credit score to help you through life financially.
Get a Personal Loan
When your credit is not the best, it can be hard to qualify for even the smallest of loans let alone a large vehicle loan or a home mortgage. To build your credit up, you need to start little and apply for a secured personal loan. When you secure the loan with a funded account, such as a CD (certificate of deposit) or a savings account, your bank will be more likely to lend you money against it. And, in return, they report your payments and the loan's activity to your credit bureau.
This will show on your credit bureau and to other creditors that you are making payments on time and are becoming more mature with your credit use. You can talk to your bank associate about your options, interest rates, and the application process.
Pay Down Unsecured Debt
Too much debt is not a good thing and can decrease your credit score Luckily, this can be improved upon. One of the most common causes of negative credit is due to excessive revolving debt. This occurs when you have too many revolving credit card accounts with high balances. Anytime you have a credit card maxed out, this shows creditors that you do not use your debt appropriately and that you use it excessively.
It is acceptable to have credit cards and even use them, but you don't want to charge them up to the maximum balance allowed. Instead, try to keep the balance at half or less than the credit line. So, for example, if you have a credit card with a limit of $4,000, don't charge the balance up above $2,000.
It is even better to use your credit card for charges and pay it off each month when you get the statement. This can include charging all your groceries, gas, and other monthly expenses and paying off the balance when you get your paycheck. Or, you can also use the card to purchase one or two small items each month, then pay them off when you get the bill. Either option will build your credit maturity and increase your credit report.
Try these techniques to help increase your credit score. The longer you use them, the more your credit rating can improve.
