Your credit score provides an indication of your likelihood to default on loans, which impacts everything from approval for new credit, interest rate offered and loan approval decisions all the way down to whether or not you actually get one at all. Your credit score is used by landlords, employers and service providers as a tool to assess trustworthiness. Many factors contribute to its calculation – some under your control and others not so much. Once again, unfortunately there may not be much you can do about external factors affecting your credit. But there are steps that you can take to increase your chances of approval for loans and leases in the future – in this article we examine seven strategies to boost your score so lenders take note.
1) Check Your Credit Report
Your credit report is one of the main components of your credit score and must be accurate. Any misstatements on it, particularly accounts that incorrectly identify themselves as collections accounts, could bring your score down significantly. If you find an error on your credit report, either disputing it or asking that the lender who reported it correct their information. If your credit score is low, one way to increase it is to clear away existing debt, including medical and utility bills, before trying to prevent any new ones from accruing. A credit repair service might be useful; however beware as these can often be quite expensive and attempt to do as much of it yourself as possible.
2) Pay Off Existing Debt
Debt can be detrimental to your credit score. If you owe a lot of credit card debt that’s left unpaid, chances are your card company is reporting it as negative information to the bureaus – this debt will appear as a drag on your report until its presence has been eliminated from it; paying it off early will see it disappear from it immediately and raise your score instantly; otherwise paying the minimum payment due can help minimize potential damage to your score in the meantime.
3) Review And Respond To Requests For Information
If you have had loans or credit cards before, lenders may request information about you from your credit report. Ignoring such requests could cause your score to plummet; respond to each inquiry promptly for optimal results. Your score may also benefit if you can demonstrate timely repayment of previous loans/cards; this can boost it considerably if payments were late or defaulted upon in the past; being able to show that all accounts have been settled as agreed will help boost it further.
4) Be Careful With New Loans And Credit Cards
When applying for loans or credit cards, be careful to not apply for too many at once. Applying for too many credit cards could hurt your credit score negatively; applying for too many at once might even cause adverse action against them! When building up credit for mortgages, car loans, or business loans it may help to establish your history beforehand; in case this doesn’t allow enough history then co-signers may help – who are equally responsible.
You can also refer to 5 Tips To Pay Your Student Loan Quick and Easily
Your credit score is an integral component of your financial profile; so if you intend on applying for loans, mortgages, or renting apartments you should keep an eye on it closely. Credit scores depend on several factors and keeping an eye on all these components will ensure your score remains as high as possible. There are various methods available to improve it but one of the best strategies for doing so would be keeping a regular tab on it and striving to keep improving it regularly.