Staying on Top of Your Payments
The most influential factor that contributes to your credit score is payment history.
It is the reflection of your ability and your sense of responsibility to pay back all the debts.
A lender looks into the payment history and evaluates if you are responsible enough to make your debt payment on time.
Therefore, if you want to improve your credit score, you could keep your debts in the green.
Take Care of Your Credit Utilization Rate
Another major influencer of credit score is the credit utilization rate.
It is the measurement of the balance between the credit limit and your use of the credit. Using too much of the available credit is a risk factor that many lenders look at when analyzing a loan application.
The higher the ratio, the lower are the points you earn, which will make your credit score suffer badly.
Leaving Old Debts on Your Report
Did you know that the debts you successfully paid off impact your credit score significantly?
If you got rid of a car loan or student debt in the past, it is a good idea to leave it on your report.
If you were not a defaulter on your previous loans and made all the payments on time, it will really help you in improving your credit score.
A long history of paying bills on time impacts the lenders as it is exactly what they are looking for in the creditors.
Time Your Applications Carefully
Before you apply for a loan, it is best to review the credit history of the past 24 months.
It is important as every time you apply for a new line of credit; your report goes under hard inquiry. It is an inquiry that negatively impacts your credit score.
The effects of this inquiry last for one year. It is a good idea to time your loan applications at the right time.
Improving the credit score takes time, and you have to be patient.
A bad credit score will negatively impact your financial situation;
therefore, make all your efforts to improve your credit score!