It is such a great financial mistake not to learn how to acquire and retain an excellent credit score. In fact, credit score impact insurance rates, being able to get an apartment or even a job says, Mehul Mathrani. Let’s talk about this in detail.
What is a credit score?
Your credit score is a tool that lenders uses to determine whether you qualify for the loan, mortgage etc. It reveals credit imbursement configurations over time along with an emphasis on current information. And a good credit score goes beyond the aptitude to get a loan at the best terms. Some factors like payment history and credit utilization ratios together exemplify up to 70% of a credit score. This means they are extremely influential.
Why credit score matters?
It is crucial to have a good credit score because it is a decision-making tool that lenders consider to know how likely you are to reimburse your loan on time. Moreover, sometimes a credit score is known as the risk score. This is because lenders can assess the risk using a credit score that you won’t be able to repay the loan as promised. Hence, having a good credit score is important as it determines whether you qualify for the loan emphasis, Mehul Mathrani.
Are you looking for the loan? And worried because of poor credit score? If yes not to worry! Improving credit score won’t happen overnight. Because credit score takes years of past behavior into account. However, there are some tips you can follow to improve your credit score.
Let’s have a look on some ways to improve your credit score in 2018:
Get a free credit report:
This is the very first step towards improving your credit scores. Do you know you can check your credit report for free once a year? You can ask from the credit reporting agencies i.e. Equifax, TransUnion, and Experian. But these reports do not include your credit score. You have to pay in order to see it.
Pay the bill on time:
As above said payment history is one of the factors in determining the credit score. A financial institution or lenders do not want to give dough to someone with a history of missed payments. Paying bill 30 days late can drag down your score. And one single late payment can drop your score anywhere about 300 points said, Mehul Mathrani.
Abolish credit card balances:
It is the best way to improve the credit score. Want to know why this method works? One of the things your credit score consider is how many of your cards have balances. Hence, charging $50 on one card and $20 on another rather than using the same card can drop your credit score. The best way to improve your score is to collect all those credit cards with balances and pay them off. After this select only one or two cards that you can use for paying bills or everything.
So, if you are going through the time where money was tight and you are not able to pay bills on time it’s time to focus on. Control your un-necessary expenditure and start a track record of paying your bills on time.
Minimize Credit inquiries:
Last but not the least method to improve your score is to hold off on recurrent credit checks. And this comes from submitting an application for a number of credit cards as well as loans. Every time you apply for the loan or cards from different lenders or creditors, an inquiry is noted on your credit report. And the inquiry list there in the report for at least two years.
Credit Score is a crucial aspect of the financial profile. And building a good credit score takes time, there is no shortcut. Follow the above tips given by Mehul Mathrani and see how your credit score get improved with time. All the best!