Your credit score could be the gateway to getting a mortgage loan, a lower-interest loan, or even having your rental application approved. If you’re looking to improve your credit score, we have some helpful tips. Below, discover eight smart ways to level up your credit score, as noted by Friendly Lender.
What Are the Benefits of a Good Credit Score?
The benefits of a good credit score include the following:
- You may have an easier time getting approved for a mortgage
- You may pay a lower interest rate on a loan
- Your rental application may be approved more readily
For these reasons and more, it’s important to strive for a good credit score. Read on to find out eight ways to do just that.
1. Check Your Credit Score and Credit Report
A good credit score will generally be 660 and above. A score between 725 and 759 is very good, while an excellent score will be above 760. The maximum score is 900, but it is seldom reached and not necessary to attain most advantages of a good credit score.
It’s important to understand the different factors that affect your credit score.
- How often you miss payments, if at all
- Your credit utilization ratio
- Amount of debt
- If you have a history of bankruptcy
- Whether you’ve had debt sent to collections
- Whether or not you currently carry a credit card balance
All of the above factors will affect your credit score. Therefore, it’s important to be mindful and practice financial responsibility. Use Credit Verify to check your score and report and enjoy additional features! Click here now.
2. Practice a Low Credit Utilization Ratio
A low credit utilization ratio will help improve your credit score. If you maintain a credit utilization ratio below 35%, you will be within the desirable range. Do not overspend on unnecessary items. Create a budget and stick to it. In this way, you will ensure that you stay on track financially.
3. Consider Debt Consolidation
Are you saddled with debt? Debt consolidation can make debt repayment easier as it may involve a lower overall interest rate and lower monthly payments. This can help put you on the road to financial recovery. If you’re struggling with unwieldy debt, consider debt consolidation as a way to simplify your monthly debt payments.
4. Build a Long Credit History
The longer your credit history, the more likely it is to impact your credit score positively. Consider keeping your older accounts open on an ongoing basis. Keep them active and continue to make transactions in those accounts. In this way, you will build a positive credit history over the long haul.
5. Catch Up on Your Bill Payments
Catching up on your bill payments is an excellent way to build your credit score. If you’ve fallen behind and need quick cash, Friendly Lender can connect you with a lender in an instant. Just apply online. It can take less than 60 seconds to submit your application.
Catching up and staying caught up with your bills will go a long way toward improving your credit score. While it is sometimes easier said than done, making this a priority will ensure that you slowly get back on track with your payments. Practice a long-term mindset, set up a budget, and allocate a specific percentage of your income to pay bills every month.
6. Use a Secured Credit Card
A secured credit card requires a cash deposit – usually equal to your credit limit – to be made when you open the account. This money then acts as collateral every time you make a purchase. Using a secured credit card may give the lender more reassurance. Should you not make a payment on time, they will be able immediately to access the collateral. As a consequence, they will see you as a lower-risk borrower.
Unsecured credit cards are what you typically think about when you hear the word “credit card.” Because they do not require a cash deposit, the lender assumes a higher level of risk and is generally not reimbursed if the borrower pays late or defaults on what they owe.
7. Don’t Apply for Too Many New Credits at Once
If you take out too many credit cards, it will negatively impact your credit score. Moreover, it will be more difficult to keep track of all the different payments. Missed or late payments can result in a lower credit score. Try to practice restraint and apply only for the credit you need. Curb needless spending and stay on budget.
8. Set Up Reminders
In order not to miss any critical due dates or payments, you can set up reminders on your phone. When the relevant alert pops up, you know that it’s time to make the payment. In this way, you can stay on top of all your bills and payments.
Is It Possible to Achieve a Perfect Credit Score?
While it is possible to achieve a score of 900, generally, it is not required to gain any additional benefits. Moreover, this score is seldom achieved. A good or very good credit score will do just as well for most purposes. If you’re struggling with a bad credit score, the first step is to work on improving it, rather than aiming for perfection.
In Conclusion
The above eight tips are sure ways to improve your credit score. If you have bad credit, you may still get a loan with one of the lenders in our network. Just fill out a quick application online, and we will instantly connect you with a lender.
We hope that you’ve found these tips helpful for your financial goals. Come back to our blog regularly for more financial content.
