Boost up your Credit Rating!

Your credit rating or your credit score shows how eligible you are to get a loan, a mortgage or even a credit card from a lending business. Since all businesses aim for a profit and not a risk, they look at how much financially attractive the borrower is, which is indicated by a high credit rating. It tells the lender how worthy you are at completing your side of the deal when taking a loan. A bad credit rating would only limit your options when making purchases. But how do you do it? Take a look at the following steps.

The first basic thing to realize is that you need to maintain a good credit record. Pay all your bills on time and avoid any outstanding payments because that would only worsen your score. Missing out any payments would just be another bad impression on your rating. Show the lender that you are responsible enough to handle your liabilities. The second most important thing is that you need to shorten your payment period. If you intend to close any accrued expenses, close the most recent ones first. Keep a record of the dates at which the costs were incurred and then plan how and when you are going to pay all of them according to the payment period given to you by your creditor. Make sure most of your bills are paid before you move to the bank for a loan. Thirdly, make sure that you do not rush in for a credit. Space out your several credit cards applications and billing mobile phones contracts. Set your priorities according to your needs and then apply for credits. This would also help you ease your burden of closing these accounts in the long run.

Another general step to bump up your credit rating is to use your credit cards lightly. Refrain from heavy purchases and try to keep off the credit card limit. Lending companies do not only look whether you make your payments on time or not but also that how much credit purchases you make. Try to keep your account balances low by buying less on credit and more on cash. Furthermore, close accounts that you don’t use much or have stopped using. Closing such accounts will improve your utilization ratio and thus will shorten your credit history. If you don’t want to close your accounts, you can transfer your balances from the less-used ones to the more- used accounts or you could even out your usage of the accounts. Also avoid financially linking your accounts with those with a bad credit score. This would only lower your chance for a credit.

If all is done and you still have some negative impression left on your credit history, you could get some goodwill from your lender provided that you’ve been a good customer after that one late payment. You can request your lender to remove that late payment from your record. There’s no harm in asking.

There’s no doubt in the fact that much of your life is evaluated on whether you’re a good debtor or not. Your credit ratings play a vital role in allowing you to make some major purchases. Hence keeping a good score should be a priority.

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