Having a low credit score can sometimes cost you a lot. A good credit score can have a huge positive effect on a lot of financial decisions, while also helping you in saving money. Most lenders or even landlords usually go through your credit to determine whether they can accept your application or not. In order for you to qualify for a better mortgage, secure, low insurance rates, get a job or even rent a home, you need to have a good credit score.
Keep reading to find out about the 7 effective ways to save your credit score.
1. Ensure That All Your Bills Are Paid On Time
Making all your payments on time will go a long way in keeping your score high. To make this easier, you should consider setting automatic payments from your checking account. Most people find it uncomfortable to set up automatic payments. In this case, you can consider setting up payment reminders with your billers.
2. Consider Knocking Off Any Errors On Your Credit Report
Some people do have errors in their credit reports. These errors are normally bad enough to result in a higher price for insurance or a financial product. If you happen to have any errors on your credit report, you should immediately get in contact with the concerned agency to ensure that the errors have been rectified.
3. Always Keep Your Balances Low
Always aim to keep your balances low by ensuring that you spend less on your cards and that you pay off your debts. Making small multiple payments during the month helps in keeping your balances low. Treating your credit card as a debit card by paying online as soon as a purchase is posted can also help in achieving this.
4. Ensure That You Leave All Paid Off Loans On Your Credit Report
A lot of people think that by getting rid of all the loans they have paid off from their report makes them look responsible and trustworthy. The fact is that when creditors look at your report and see that you paid off your debts well, it will likely work to your advantage. Most people decide to go for payday or no credit check loans in order to help them save their credit score since most of these lenders do not lend based on your credit score. However, caution should be taken to avoid late payments since most of these lending companies will tend to report you to the relevant agency tasked with rating your credit score in case you fail to make your payments on time. This in turn negatively affects your credit score.
5. Limit The Number Of New Accounts You Open
You should try to avoid opening new accounts within a short period of time or avoid opening new accounts altogether if you don’t have to. This is because the company you are looking to open a new account will perform a hard inquiry. This then shows the potential of new debt and, in turn, it represents a possible risk.
6. Always Use A Small Portion Of Credit Available To You
Consider keeping outstanding charges always below 30% of your available credit limit. The idea is to prevent maxing out or getting close to maxing out your credit accounts, whether you always make your payments on time or not.
7. Ask For Credit Limit Increase
There comes a time when your limit goes up and your balance stays the same; hence lowering utilization. In such a case, consider calling your card issuer and ask for a higher limit without having to do a hard inquiry.
If you are looking to make your life easier by getting a better chance of qualifying for loans or credit cards, it is important to always follow the steps discussed above, so as to ensure that you save your credit score. The bottom line here is to always ensure that your bills are paid on time and your debts are kept low.