Ways To Improve Your Credit Score

Ways To Improve Your Credit Score

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You may think that credit score is not important and only matters when applying for a loan, credit card or getting a house, what you don’t know is it goes beyond that and has a major role in your financial situation throughout your life.

A credit score is a historical data to determine if you have the capability of paying back the money you want to borrow or loan you want to get. It also has an impact on your employment or even for finding a job because employers will use this to know how responsible you are.

Below are the ways that may help you build a good credit score:

Pay bills on time

Paying bills on time as agreed every month can go along way to improving your credit score. When you miss your payment, like on your credit card, phone bill, or electric bill, there’s a big chance that your credit score will go down. Always make it a habit to write down or use an electronic calendar that emails you reminders. This can help you avoid mistakes that come with forgetting your bills.

Apply for credit only when you need it

When applying for a credit card, ask yourself if you really need it and sure that you able to manage it. Don’t apply just because you want to because it can hurt your score in the long run, especially if you don’t manage it strategically. But if you are a good borrower who has already build a good history and has a plan on making a major purchase, then you can consider applying for a new one.

Create an emergency fund

It’s very important to have an emergency fund because that means you have the cash to use for your unexpected expenses and that your credit is intact when you want to use it. With having an emergency fund, it will be easier for you to stay focused on getting out of debt which can lead to having a good credit score. This 2019 start saving money and make sure that you are spending less than you earn.

Spot unknown transactions

If you spot transactions that you don’t recognize, big or small, take an action toward this because you might be a fraud victim. Report this as soon as you notice it to your credit company so they can check the errors and help you prevent this kind of issue. It’s also best to monitor your transactions from time to time rather than waiting for your billing statement to arrive.

Keep your credit utilization low

Lowering your credit utilization can help you build a good credit score. It can be helpful if you don’t use much of your available credit to make a purchase. Another option is to call your credit card company and request for a credit limit increase, or you may be able to do it online. If you keep your credit utilization low, it will show that you know how to manage your card, so it’s important to always look for the best possible ways to maintain it.

Improving and building your credit score doesn’t happen over time. Time and patience are needed especially knowledge. The good thing is, if you build a good credit score, it can open doors for you. Try the ways above and work to help yourself.

 

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