Are you looking to improve your credit score? Are you wondering if there’s a quick way to do it?
Believe it or not, poor credit is not the end of the world. You can improve credit scores in a short amount of time with some careful attention to your spending habits. They give you increased buying power and quicker approval.
Here’s what you need to know about getting a good credit score.
What Are the Credit Score Ranges?
Generally speaking, a credit score is an assessment of how likely you are to pay your bills on time. Higher credit scores usually mean you’ll get better loan terms. These may include lower interest rates.
Your credit score is based on a number of factors. These include credit reports, payment history, and the amount of debt you’ve accumulated. Potential lenders will have more confidence in lending you something when they realize that you’ve demonstrated responsible behavior in the past.
Generally, a credit score below 597 is considered poor. A range of 580-669 is fair, and 670-739 is good. A credit score between 74 and 799 is very good, and one between 800 and 850 is excellent.
Different lenders, however, may have different criteria when it comes to lending. If you’re looking for a home loan, for example, your lender may be looking to see how likely you were to pay your mortgage in the past.
Getting your credit score up is important if you want to take out another loan. There are a number of ways to do this.
1. Pay Your Bills on Time
Believe it or not, paying your bills on time is the biggest factor when it comes to your credit score. In fact, late payments can remain a part of your history for several years.
If you haven’t been paying your bills on time, you may really benefit from a strict household budget. This can be done with a simple spreadsheet where you track your total income in one column and your expenses in another.
Make sure you consider all of the payments you have to make. These include your mortgage, utilities, and auto loans. Of course, you’ll also want to take into account your credit card bills.
Monthly expenses could include things like groceries, insurance, and personal care. Some things will vary from month to month, such as what you spend on gifts. You can estimate these.
Finally, it’s important to make sure that what you’re earning covers what you spend each month. If it doesn’t, you may need to tweak your spending in certain areas.
You may, for example, be able to spend less on groceries by shopping at a different store or looking for digital coupons. Or you may be able to get your hair styled at a discount salon.
Budgeting may initially seem like a big headache. Eventually, however, it will give you the freedom you need to get better loans and make better decisions. You’ll also feel more relaxed knowing that your finances are under control.
2. Automate Payments
If your credit score is a matter of your being forgetful or putting payments on the “back burner,” automated payments can help you to make them a priority. If you forget to pay on time each month, you can ask your creditors to take funds out of your bank account automatically.
If you have a tendency to blow your paycheck, schedule automated payments for the day after you get paid. This can help you to realize just how much money you really have to work with.
3. Consider a Credit Repair Company
A credit repair company can help you repair and remove inaccuracies in your credit report in order to help you improve your credit score. These may include things like duplicate accounts or accounts that don’t belong to you.
Before choosing a credit repair company, make sure you check out online reviews and ask for references. These can give you the assurance that you’re making a good decision.
4. Pay More Often
Your credit card companies may allow you to make more frequent payments throughout the month. These are called micropayments. Paying your credit card off more frequently can improve your credit as well as keep your balances low.
5. Ask For Higher Limits
If you can raise your credit limit without increasing your balance, your credit score will instantly improve. Your credit company will be more likely to do this if you’ve had a recent positive life change, such as an increase in income.
If you have a tendency to overspend, increasing your credit score may not be the best option.
Benefits of Better Credit
Higher credit scores mean that you’ll have an easier time getting approved for things like home or apartment rentals. You may also have better interest, lower insurance rates, and the ability to avoid security deposits.
Believe it or not, some employers may also want to see a copy of your credit report before they hire you. Improving your credit can lead to improved self-esteem and a better outlook on life. It’s worth it to take the time to see how you can get your credit on the right track.
How to Improve Credit Scores
The best ways to improve credit scores don’t always involve financial expertise. With the right budgeting, payments, and tricks, you could be on your way toward excellent credit in no time. Your wallet and lifestyle will thank you!
Don’t stop getting smart about your credit score now.