How to increase your credit score?
It is an important question and usually asked by many people. There are many tips or tricks on increasing the credit score. So, without further ado, let’s talk about them.
Evaluate the Credit Report
Your bank or credit card institution makes you entitled to get one free credit report annually. It is important to review the report. You must do it closely and if you find any errors, dispute them.
This is the closest way to have a quick credit fix. Notify your bank about the outdated or erroneous information. This enables you to improve your credit score as soon as the bank remove the false information.
Set up Payment Reminders
For each bill in a calendar or planner, it is important to note the payment deadlines. You can also set up reminders online. If you pay your bills consistently and on time, it will increase your credit score within a couple of months.
Also, we recommend you to pay multiple times than once in your billing cycle. For example, if you can manage to pay it, then it is a good idea to pay down the bills every 2 or 3 weeks instead of once a month. This improves your credit score by lowering your credit use.
Contact the Creditors
You must contact your creditors to create a payment plan. Experts recommend people to contact their creditors immediately. This, in particular, is useful if you have missed payment deadlines and cannot afford the monthly bills. If you do this quickly, it will ease the negative impact of late payment as well as high outstanding balances.
New Credit & Unused Credit Card
We suggest you to sparingly apply for new credit as it will increase the total credit limit. At the same time, it can harm your credit score if you have several new accounts is a short period. Another important way is not closing your unused credit card accounts.
We all know the significance of credit history and the longer it is, the better. Even if you want to close your credit accounts, we suggest closing newer ones.
Account Diversification
Diversifying your account is another way to increase your credit score. For instance, 10% of your credit score comprises credit cards, student loans, auto loans, and mortgage. This is called a credit mix.
When you add another element to the existing credit mix, it helps increase your credit score. However, you need to ensure timely payments.
Zero-Percent Interest Card
Check if you can qualify for a 0% interest card. Many banks offer credit cards with 0% interest on the balance. However, be careful as some companies put caveats to this. For example, the bank may charge you for balance transfers. The 0% offer is typically good for an introductory period – i.e. 12 to 18 months.
