When we hear that a good credit score will get you the best deals on personal loans and get you the best credit cards there are, it is not fresh news. But how are we going to get a good credit score? The question many of us find ourselves asking is this. So here are 10 sure-fire tactics and tips for raising your credit score:
A. PAY YOUR DUES ON TIME
Clearly, the credit card bill states the bill’s due date. Stick with the date. On or before the due date, pay your credit card fees. Not only would this be a positive thing for your credit score, but it will help you save on late fees or other charges as well. You come off as a responsible creditor in front of your lenders if you pay your dues on time.
B. PAY YOUR BILLS IN FULL
It is not the only important thing to pay your bills on time. At the end of the payment period, you need to make sure that you pay the whole bill. You may have learned that it is a smart idea to maintain a balance on your credit card. Yet it is a myth indeed. It will pay interest if there is any debt on your credit card. You can miss the interest by paying the whole amount on time.
C. MAINTAIN CREDIT UTILIZATION RATIO
There is a limit that you are entitled to when you get a credit card. This cap, however, is not an indication of how much you can use each month. The ratio of credit usage is the ratio between the total amount you borrow on the credit card and the entire credit limit you are given. Between 30 percent and 40 percent is the optimal credit utilization ratio.
D. MAINTAIN DEBT TO INCOME RATIO
When they check a person’s creditworthiness, lenders take a lot of things into account. One of those things is the debt to income ratio. It is crucial that you keep the amount of debt you have above your monthly income. At any point, this ratio does not exceed 40 percent.
E. KEEP OLDER ACCOUNTS ACTIVE
The length of the payment history also plays an important role in deciding the credit score of an individual. It is also recommended that older accounts remain involved. You should not close them even if you have a few defaults on your old accounts. This is because, after one year, defaults stop affecting the credit score and are eliminated from the report after two years. As there is not enough time to follow a trend, newer accounts do not get you a high credit score.
F. USE YOUR CREDIT CARD FREQUENTLY
It is of no value if you have a credit card but do not regularly use it. Use the advantages of your credit card by consistently using it. For your gain, accumulate the cashback/reward points offered on the card and encash them. This will allow you to create a credit record as well. This will allow you to create a credit record as well.
G. RECTIFY ANY ERRORS ON YOUR CREDIT REPORT
Your information on the credit report and transaction details will be corrected by bank officials. You’ll be awarded negative points in the event of a mismatch. Ensure that, if and when you find them, you contest any mistakes on your credit report. Checking your credit report periodically to keep track of errors will be an important step in this direction.
H. DO NOT APPLY TO TOO MANY PLACES
When you check your credit report, it is known as a soft inquiry. This does not have any impact on your credit score. But it is known as a hard inquiry if you apply for credit at a financial institution and they run a credit score search. This can have a negative effect on your credit score. Therefore, you need to make sure that at some point in time you do not apply to too many locations, or else your credit score will be adversely affected.
I. CHECK YOUR CREDIT REPORT FREQUENTLY
Identity theft is one thing that we do not predict. Cyber-criminals have devised different ways to manipulate clients and collect their personal information. To impersonate them and gain access to their credit cards, they then use this data. The expenditures they produce may have a negative effect on your credit score. You need to keep track of your financial statements at all times in order to keep track. Notify the bank and secure your credit as soon as you find a difference.
J. KEEP YOUR CREDIT DIVERSE
The type of credit you have borrowed in the past is also noted by banks. A person’s ability to efficiently juggle and maintain various types of credit is seen as a positive thing. To increase your credit score, ensure that you have multiple forms of credit in your credit history.