Some people do not believe credit scores are all that important, and that could be true if they’re buying everything in cash. However, not everyone in this world is always that lucky. Many don’t have money in the bank to purchase a home for hundreds of thousands of dollars. Nor do they always have the funds to buy things like cars outright. After all, research shows the average price of a vehicle is $42,200.
Of course, credit can also impact whether a person gets approved for a personal loan or not. It can be a factor in determining if the individual needs to put collateral down too. In addition, a good credit score can get you a good interest rate on loans, while a bad one will have the opposite effect. Those who obtain credit cards, mortgages, etc., with high-interest rates tend to repay much more than people with low-interest loans.
All is not lost if a person doesn’t have the cash to spend and needs financing. Such individuals can still get the things they need, like vehicles, via car financing companies for bad credit. But as a consumer, that can leave you feeling as if you do not have any options. Then, you may get into a bad deal simply because there isn’t another alternative.
However, what if there is a solution? You could improve your credit score and get lenders competing for your business. Hopefully, that will ensure you always come out on top. You can use the following tips to give your number a boost.
Pay Bills on Time
Many businesses report past-due payments to credit agencies. When customers miss payments, and that happens, their credit scores take hits. The figures decline, and issues can arise when they try to open new lines of credit. Aside from high-interest rates, those with bad credit can even be denied loans outright.
So, do yourself a favor and pay your bills on time, specifically those that are reported to credit agencies. That will help your credit score stay in a good place and keep headaches at bay.
Take Care of Overdue Bills Promptly
Once bills become past due, it can be hard to get them caught back up. However, if you want to improve your credit score, that is a must. If you get behind on credit card payments specifically, several steps can be taken to get things back on track. For example, it may be possible to get a company to help manage accounts. They’ll budget and organize your finances, combining multiple accounts so that you only have one affordable payment to make per month.
People who would rather not go that route can also reach out to lenders directly. They can speak to representatives about payment plans or other solutions to fix the matter. Just be sure not to go too far back. Once bills go to collection agencies, lenders close accounts and no longer expect to get paid for them. Making even a minimum payment could reopen the tab, lowering your credit score.
Obtain a Secured Credit Card
Secured credit cards aren’t for everyone. However, if you’re working toward better credit, applying and obtaining one of them could be the perfect solution. These cards allow people to purchase goods and services just like traditional credit cards, but the primary difference between the two is that people have to put money or security deposits down to open secured accounts.
If your main objective is to improve your credit score, be sure to discuss the situation with the lender. Some companies report things to the credit bureaus while others don’t.
Sign Up With a Service to Immediately Boost Your Credit Score
Another way to improve your credit score is to sign up with a service that will increase it immediately. For example, have you heard of Experian Boost? It gives people credit for payments they make on phones, utilities, and even popular streaming service bills. The company’s website claims that the tool has already boosted millions of points across America. Hence, if you’ve been searching far and wide for an option to make your credit score jump fast, this could be a great choice.
Ask a Friend or Relative for Help
Have you ever thought about becoming an authorized user on someone else’s account, like a friend or relative, perhaps? Research shows that becoming an authorized user on another person’s account is an excellent way to improve one’s credit score. Therefore, don’t hesitate to reach out to the people close to you and ask them about this option.
One thing to keep in mind is that approximately 15 percent of your FICO credit score is based on various factors, including the age of your accounts. And typically, the older an account is, the better. So, try to find someone who has had a credit line for many years to improve your credit score.
The Final Thoughts
Hopefully, you now understand why credit scores matter. Consumers need credit to finance big-ticket purchases, take out loans, and more. That’s why you should use these tips to improve your credit if your credit score is lacking.
About The Author
Vipul is a professional blogger and online advertiser based out of Bengaluru, India. Always in a quest for new ways to make money, Vipul detail out all possible opportunities that can help anyone to earn passive income online. You can connect on Twitter, Linkedin & Facebook