The credit score of a consumer directly influences the opportunity for a loan and revolves around credit accounts. Credit scores hold a good impact on interest rates regarding what a bank can offer a consumer. If a consumer has a low credit score could be denied for the credit and can be considered at high risk, they can experience high-interest rates compared to the person who has a good credit score. Each lender has their own points for deciding whether to lend you; they can reject you and accept another for the loan.
It is always good to have a healthy credit score. Here are a few steps which can help you to increase your
credit score –
Check your credit report –
Remember to check your credit annual report at least once a year, as you are entitled to have one free report a year. Review your report closely to make sure the information it contains is correct, compare the amount of credit and available amount, tackle the dispute, or any error that you find immediately notify the agency so that they can remove the false information as soon as possible.
Pay down debts –
Always pay your bills before the closing date; it is the most important thing to improve your credit score; you can set up an automatic payment from your bank account. Set up payment reminders as late payments are the most common source of drop-down in the credit score. Late payment gives negative information on the credit reports and can detrimental to the credit report. Always clear your dues monthly to avoid late payment charges.
Keep the balance low –
Always keep the credit card balance low as if it affects the credit score. The balance in credit card is also calculated into your score as the available credit drops below 65%. The credit score can be damaged and can reflect a high balance to credit limit ratio. Always actively pay high balances, as it can be good for your credit card balance. Doing this will maintain the credit score and also improve it.
Build a good credit history –
Timely pay your debts, make monthly payments to your credit card, and Always stay within the credit limit. This will help in convincing the lender that you are a responsible borrower. Avoid incurring any interest and late payment on your credit card.
Keep the unused account open –
It is another point that should be considered as a credit score is determined from how long a revolving account has been open. The longer the credit card history, the more it will help. It is good to keep an old account open, which is no longer in use, as having several open accounts and using a few can improve the credit score, but too many cards can have an adverse effect.
Apply for a new account –
If your current card issuer doesn’t increase your credit limit, then apply for a credit card from a different user as it will help in your utilization rate as it is based upon your balance and credit. Although having multiple accounts is not a good idea.