Your Credit Score
Your credit score is something that follows you around for a long time. It is based on your past behaviour, whether good or bad. Why it might not always seem fair, it’s a reflection of your financial history over many years.
Credit Score Benefits
A good credit score is an issue that causes stress for a lot of people. There are numerous reasons why an adequate credit score is necessary for your daily life. Many employers will carry out a credit check in advance of offering a position of employment. Prospective landlords will almost always check your credit history to ensure you will be able to pay your rent on time. When applying for car loans, mortgages and other lending facilities, your credit score may help or hinder your process. While it might not always seem fair to judge your character based on past financial indiscretions, credit scores rarely lie. You might not always have been as dedicated to keeping your personal finances in check. The result of this will appear in your credit score.
A major factor in attaining a good credit score is focusing on revolving credit. Keeping the percentage of the credit you have, versus the credit you are using low will have a positive effect on your credit score. The optimum percentage you should be focusing on is 30 percent or lower. If you have a number of credit cards, it might be worth considering investing in a personal loan to keep the level of revolving credit low.
Keep Track Of Your Credit Cards
It’s important to pay down the balance on all of your credit cards. People often own several credit cards at once. When carrying out purchases, you might think it’s a better idea to spend $100 on one card, and perhaps $200 on another. This might not be the best strategy when it comes to your credit score. It can be easy to ignore or forget an outstanding balance on a credit card, especially when it is for a small amount. Instead, it is better to pay off the outstanding debts on all your credit cards. In the future, you should stick with one or two credit cards, using them to consolidate all your debt into one place. This will allow you to track what you are spending, and keep on top of your debt.
Be Proud Of Good Debt
Some people try and get old debt removed from their credit history. This isn’t always the best tactic. If you have paid off a loan for a holiday or a personal item in full, and in a timely manner, you should be proud of it. Even if the loan was from several years ago, you should use this to leverage a better credit score. The longer the history of good debt is on your record, the better your credit score will appear.
Dispute errors that occur on your statement. Everybody makes mistakes, even banks and credit card companies. Contact Equifax, Experianor TransUnion to report any mistakes that you might notice when your statement arrives. Ignoring the issue is only going to hurt your credit score, and you deserve to be rewarded for your hard work.
If you have a history of poor credit, you can always negotiate with your bank to see what you can do. People fall into hard financial situations from time to time. Perhaps you were unemployed for a period, or there were some added expenses in your life such as medical bills. Banks aren’t inhuman. As long as you are willing to communicate with them and explain the situation, you can hope to change your credit score. Write a letter to your financial institution explain the situation and agree to pay the balance in full. This will go a long way to improving your credit score.
Don’t portray yourself as a risky customer. Credit providers love those who are consistent customers. When managing your personal finances, budget an amount that you allow yourself in credit each month. Also, factor in a repayment plan for yourself, and determine how much you can pay back over a period of time. Being consistent in your credit history will indicate that you are a reliable customer. At the end of the day, financial institutions want to see that you are a steady customer. This will be reflected in your score.