Looking to build your credit score? Whenever you wish to get a loan, you need to know something about your credit score. A credit score is a number that creditors look at to find your viability to get credit.
A bad credit score can keep you from financing your kid’s education, or from buying a new home. Therefore, it’s very important to build a good credit history. Here are five creative ways for improving your credit rating:
1. Get a Credit Card and Pay Your Balance On Time
To build your credit score, get a credit card, but remember to only start out with one credit card for the moment. Remember that the more credit cards you have, the more debt you’ll end up with. You need to be responsible with one credit, before you insist on applying for a second or third credit card.
In addition, remember to pay off your card’s balance on time. If you only charge your card for the items that you can afford to pay, then you won’t need to wrangle with any future debt problems. By paying your credit card’s balance every month, this would show that you’re capable of paying your bills, and will send a positive signal to most creditors and lenders.
2. Don’t Ask for a Higher Limit from Your Credit Card Company
If you have a credit card, don’t be tempted to call your credit card company and ask for a higher limit, because this won’t build your credit score; it will ruin your credit score. Next, don’t open any extra credit card accounts, because by having an extra credit card, or by canceling the other one, you can do major damage to your credit history.
Also, make sure that you don’t transfer your balance from a card that offers high interest, to a card that offers a lower interest rate.
3. Pay off a Sizable Amount of Your Current Debts
To build your credit score, pay-off a sizable part of your current debt load. You want to lower your credit utilization since the more available credit you have, the more will your credit score improve. Also, have a considerable savings and checking account, as well as learn to regulate it too. Your creditors will view a well-managed bank account as a sign of stability.
4. Add Other Small Forms Of Credit
Once you’ve paid-off a large part of your current debts, add other forms of credit, like get a small mobile phone contract, and pay it off every month. Small bills like mobile phone monthly payments may help to enhance your credit rating, and will also show that you’re well-rounded when it comes to handling different forms of credit.
5. Dispute Any Errors In Your Credit Report
If you still haven’t seen an exact copy of your real credit history, get a copy now and analyze it properly. Log on to sites like annualcreditreport.com and others, and get a copy from the credit bureaus too. Once you get a copy of your credit report, check out each of the details, and quickly highlight, as well as dispute any errors or numerical flaws. An incorrect report can actually deduct as much as 100 points from your credit score.
Those are some tips to help you build your credit score.