Last Updated on May 29, 2020
Your credit score is extremely important. A bad one can make it impossible or at least harder to get a loan, buy a car or apply for a mortgage, while a good score can get you a loan with lower interests or premium rewards credit. It’s not easy to improve your score, but it’s certainly possible.
So check your current credit score to see what you need and use these tips to start improving.
Stay in green
Payment history is one of the most important things that influence your credit score (if not the most important). So it’s good to have a credit history but it must be a history with no delays, defaults, repossessions or third party collections. Pay on time to show you’re responsible and trustworthy.
Watch out for credit utilization rate
Credit utilization is your balance compared to the credit limit. If you’re using too much of available credit, you can be a risky borrower, so the lower the ratio, the better. The best rate is less than 10%, so be reasonable.
Don’t wipe out your history
If you just finished paying off your student loan, you’ll probably want to forget all about it. But if you’ve never had any delays, don’t try to wipe everything out. Many people think that they have to close all accounts, even credit cards, to be eligible for a loan, but it’s not true. A paid account can actually help you score better.
If you want to know more about what affects your credit score and what are the statistics, check out this infographic provided by realisticloans.com: