Despite your circumstances, there are always improvements to be made. When it comes to establishing yourself as a young adult, or overcoming financial problems which affected your ability to get credit, making a decision to improve your credit score is the first step towards better opportunities in the future.
Confronting our realities when it comes to credit and our ability to obtain it can sometimes be difficult. Adopting the ostrich’s methods of burying your head in the sand may seem a better option than performing your own credit check, but running away from problems only ever seems to make things worse. While your credit score may be an indication of your ability to handle finances and likelihood of paying creditors back, it is changeable.
Below, we take a look at the best ways to improve your credit score, starting today.
Make a sizeable payment against your outstanding balance
If you use credit cards and have an outstanding balance, it will work against you in two ways: your interest repayments and your credit utilization ratio. Even if you have not maxed out cards, or have no plans on using a credit card for any future purchases, your credit utilization ratio will keep your credit score from improving.
While it is not always easy to find the cash to do this, it certainly a way to see your score rise and therefore improve your profile in the eyes of lenders. Making a couple of sacrifices in order to pay a lump sum against your debt could work wonders for your future.
Check your credit report for errors
Mistakes happen, that is a given. However, you may be paying for errors which would have otherwise helped your case in obtaining credit. Erroneous information provided to credit reference bureaus can seriously affect your score and this could have a significant impact on your ability to get a mortgage, credit card or any other type of credit.
It is of high importance to ensure that the information on your credit report is accurate and up to date. According to information released by the Federal Trade Commission, an astonishing 5% of consumers had errors on their credit reports. Approximately 20% of those people who reported errors saw an improvement in their credit scores.
Request a higher credit limit from your lender
If you don’t ask, chances are you don’t get. It’s that simple. Approach your credit card company and simply ask them to consider you for an increase in your credit limit. The better the relationship you have with the company, the more chance you will have of obtaining a higher limit.
This can have a very positive impact on your credit utilization ratio. You may be surprised at how easy and hassle-free this is to do, so it is always worth a shot if you are struggling to think of ways to bump your score up a little.
When it comes to your credit score, learn everything you can about how to improve it for the better and you will reap the rewards in due course! Some are quicker than others, but that does not necessarily mean they have to be ignored.