4 Handy Tips to Improve Your Credit Score Fast

A good credit score bears a lot of importance when applying for home loans. Your credit score is assessed thoroughly when you begin the home loaning process. A bad credit score can deprive you of certain loan options and low interest rates. Additionally, mainstream lenders hesitate to offer those with low credit scores loans as they connect it with a higher chance of default.

Don’t worry! There are always ways to improve your credit score by following a certain set of rules and financial activities. Here is a sneak peek into some handy tips which you can use to improve your credit score within months:

Always Stay Below 30% Credit Utilization

Credit utilization is how much credit you use out of the total available to you. Experts in the industry advise that you should keep your credit utilization below 30% to maintain a strong credit, and even help it gradually increase. This means that if you have $5000 available credit, you should never exceed an outstanding balance of $1500. Keep in mind, this number is your total available credit on all of your accounts, not each one individually.

Make Your Payments Timely

Making your payments regularly on time is a good way to showcase that you are trustworthy as a borrower. When a lender sees that you are making regular payments without any delays and you have well-managed accounts, then this factor contributes a lot to improve your credit score.

You should also set up payment reminders to ensure that you don’t miss out on any upcoming payments at all.

Keep Your Old Accounts Open

Everybody has a history of loans that are already paid off. But there is no need to get these paid loans removed from your reports. If you have already paid some loans, then you must keep them stated on your report. Doing so would showcase your timely payments.

Closing an account that comprises paid-off loans would bring no benefit to your credit score. You should keep such accounts open. Additionally, closing an account might accidentally push you well over the 30% credit utilization ratio.

Don’t Apply for New Credit Unnecessarily

A hard inquiry is carried out on your credit report when you apply for new credit. This causes your credit score to drop temporarily. Applying for new credit is not bad. But doing this just because you are pre-qualified for it is not a good approach at all. Too many hard inquiries can put your potential lenders in suspicion.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: