The credit score of a consumer directly influences the opportunity for a loan and revolves credit accounts. Credit scores hold a good impact on interest rates in terms of 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 in comparison to the person who has a good credit score. Each lender has their own points for deciding whether or not 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 –
Always 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 which it contains is correct, compare the amount of credit and available amount, tack out the dispute, or any error which you find immediately notify the error to 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 one should do 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 the late payment charges.
Keep the balance low –
Always keep the credit card balance low as if affect 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 and 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 taken into consideration 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 as well.
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.