There are numerous points of interest in having a high credit score – speedy and straightforward loan approvals, low-cost loans, and even a choice of the Top Credit Cards. However, you cannot get a high credit score overnight. It requires perseverance and hard work. Also, you need to be disciplined when it comes to paying off your dues and financial obligations.
Getting and keeping a decent credit rating doesn’t happen on its own. You have to learn certain habits so that you can give your credit score a much-needed boost.
1. Regularly Check Your Credit Report
To enhance your credit score, you need to ensure that there are no mistakes in your credit report. Due to delayed reporting by banks and financial institutions, there could be errors that are dragging your credit score down. If you do find errors, make sure you get in touch with the credit bureau along with supporting documentation. The credit bureau will correct the mistakes. Alternatively, you can approach your bank and ensure they take remedial measures. Your aim should be a credit score of at least 750, and if errors in your credit report are preventing it, you need to amend them.
2. Have a System in Place to Pay Bills on Time
Credit bureaus have a mathematical algorithm to compute your credit score. They take into account your utility payments, Credit Card payments, and loan payments each month to give you a three-digit score. Banks have the onus of reporting your payments each month. So, use automated payment facility that comes with online banking to ensure your utility bills and loans get paid like clockwork each month. You can even set updates on your telephone to alert you of the monthly and yearly installments that you have to pay.
3. Maintain a Budget and Track Your Expenses
Knowing where your cash is going every month can help your credit rating. It means creating a financial plan so that you know your cash inflow and outflow. As a result, you will be less inclined to miss a payment on your loans, Credit Cards, and bills.
Having your financial plan and funds in a single place enables you to effectively make procedures to pay your dues and put something aside for future buys or retirement. You can ascertain your obligations and check how to distribute your monies for investments and to pay off high-interest loans.
4. Minimise Use of Available Credit
In case you have a Credit Card with high limits, refrain from piling new purchases on it. Use your Credit Cards judiciously and pay off the dues in total each month. Do not carry over any balance as you will pay exorbitant interest on it.
While it is prudent to have a line of credit, your credit usage should never exceed 40% of your income. Apply for the Top Credit Cards Online that come with cashback, travel miles, and rewards program to maximise your gains. Keep each Credit Card for a specific use, but at the end of the month, ensure you pay the bill in entirety. You can easily apply for a Credit Card online after comparing the perks and benefits.
5. Protect Yourself from Identity Theft
While it’s difficult to shield yourself from data fraud and misrepresentation completely, you can moderate the harm. The initial step is checking your credit report for any discrepancy, including applying for Credit Cards or loans that you did not apply for in the recent past.
Also, check your Credit Card statement with care. If you notice a charge you did not make, contact the card provider right away. You should do the same if you lose your card. Remember, it is easier to replace a stolen Credit Card than it is to repair damaged credit history.
6. Credit Card Diversity
Savvy card users know the significance of having an assortment of Credit Cards. You will see that many people who have a high credit score have a propensity for utilising different cards. With a one-dimensionalrecord as a consumer, your score will only increase by a small degree.
The best way to help your credit score surge is to have different cards for different purposes. For instance, use a travel miles reward card to book your vacation, use a cash back card to fill petrol in your car, and use a 0% intro APR to make big purchases.
Turning into a loan guarantor for somebody can hurt your credit score. If the borrower defaults on the loan, you will be liable to repay it as a guarantor. In case you don’t repay the loan, your credit score will suffer. Hence, be firm and refuse to stand as a guarantor for a friend or acquaintance. It is not worth the risk.
The Final Words
Many people do have a reasonably good credit score, but cannot sustain it due to an uncontrolled usage of Credit Cards. Make sure you apply for Credit Cards only if you are financially secure and able enough to pay them on time. If you cannot prudently manage cards, it is best to switch to cash and online payments to control your excessive spending and to repay your debts. Otherwise, your credit score will take a beating, and you will find it tough to restore it to its former glory.
Adopt these seven habits to help your credit score increase so that you can enjoy the benefits of it.
Also Read: 9 Best Credit Cards You Should Own in 2018
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