Your credit score is one of the most important numbers that you will always want to keep an eye on. Your credit score will affect loans that you will want to have in the future. Having a bad credit score may contribute to your application denial or disqualification on certain loans like mortgage loans or auto loans.
However, it is good to know that there some ways on how you can increase a low credit score. In doing so, you will have higher chances of having approved loan applications. You will just need to keep in mind two important matters when trying to increase your credit score. One is sticking to wise credit decisions and the other is being aware of the value of keeping a good or high credit score.
Once you have practiced both, you are ready to increase your credit score using the following ways.
Practice checking your credit score regularly
When you practice checking your credit report regularly, you will be able to determine several things. First, you will be able to gauge how much more effort you should exert in order to maintain a credit score high. You will also be able to see common errors that may affect your applications. Some common errors that have major effects on your credit score are identity theft. An undesirable may steal your information and perform some transactions while pretending to be you. This may negatively affect your credit report. The best way to spot and prevent this is be regularly checking your credit report.
A regular credit report checking does not mean doing it on a monthly basis. Checking annually or bi-annually is already a good practice. In doing so, you will be able to solve such issues mentioned before they can even affect your score. If you find errors, you may dispute these errors immediately. This is so that if you may need your credit score for loan applications no delays and issues will occur.
Pay your dues on time, every time
Paying your dues on time is a good practice to consider if you are treading the goal to increase your credit score. Late or missing payments can severely drop some numbers on your credit score. In addition, it may take several months to recover the scores due to late or missed payments.
To combat this, you just need to ensure that you will be able to pay every month as soon as your statements arrive. You can note them in your planner or calendar. Alternatively set an alarm on your mobile phone so you may be reminded. You can also sign up for automatic bill payment. Automatic bill payment allows your creditors to automatically take your payments directly from your bank account on the dates, which you specified or until you have fully paid off your due.
Decrease your debts
Another way to increase your credit score is by decreasing your debts. One such ratio that can affect your credit report and credit rating is the debt to income ratio. This means, you must do everything in your power to spend wisely and pay off your debts religiously. You must try to cut off or decrease unnecessary spending so you may have more or enough money to pay your debts. You can also get an extra job so you may be able to earn more money to pay off your debts.