Improving your credit score offers several benefits in various aspects, such as getting loan approval, renting a home, and getting lower interest rates. Fortunately, if you have low credit, you can increase it by implementing various strategies. Here is what to do to improve your credit score.
Avoid Late Bill Payment
Keep paying your bills on time to improve your credit rating. Late payments can negatively impact your score and prevent you from enjoying its benefits. It’s important to pay your utility bills, rent, internet, cable, and phone bills on time. Prioritize your bills and pay all bills on time or earlier. This will also ensure that you will not incur any additional finance charges. If you already have pending bills, pay them immediately and start building your credit score. If paying the minimum amount due each month is not possible, contact your credit card company to try to arrange a revised payment schedule.
Keep Checking Your Credit Report
Some people ignore checking their credit reports and end up with numerous issues in the long run. It is imperative to check your credit history at least three times per year. Fortunately, you can get the report for free from various credit history organizations. Some people run into errors in their credit reports, and this affects their rating. This is why you need to check it even if you feel everything is okay. Sometimes you may encounter erroneous records such as late payments, outstanding debts, and credit limits. If you notice such areas, you should immediately file a report to the relevant unions and ask them to change your credit history to reflect the correct information.
Clear Credit Card Debt
Huge outstanding balances in your credit score will have a significant impact on your rating. This is why you need to keep the balances as low as 30% of your limit. Write down all your outstanding debts ranging from the largest to the lowest, and plan how you’re going to clear them. Begin with the lowest as you go up to the largest. This strategy needs the commitment to reduce and ultimately clear all the debts as you increase your credit score gradually.
Dispute Errors in Your Credit Report
You can request the removal of errors such as late payment and credit limits from your credit score. Call the concerned parties and let them pull it down, thus improving your credit score. The organization will advise you on the way forward, whether they will remove the error or not. Once your information gets approved, request confirmation in writing to have concrete evidence.
Contact the Credit Card Company
Sometimes, you may not have control when things go wrong with your finances. It may be employment termination or reduced income, and injury or illness and you’re no longer able to pay your bills or time or clear your debts. This is why it’s important contact your credit company about what you are going through. Your lender will advise you on what to do. However, once you get back on your feet, ensure you immediately pay all the outstanding bills to increase your credit score. Keeping up with a good payment record will overshadow the delayed payments and improve your rating.
The Bottom Line
No matter how tough it gets with your finances, you will always have a way out if you plan well and know what to do. Use the tips above to build your credit score and earn the benefits of a good credit rating.