5 quick & easy ways to improve your credit score (fast!)
Posted December 2016
Unlock lower interest rates and higher loan approval with these 5 tips
Your credit score may be with you for life, but a bad credit score doesn’t have to be!
As we’ve covered in the past, your credit score could be the factor that decides how much interest you’ll pay when you’re approved for a loan or line of credit, if you’re given the tick of approval at all.
Among other things, a credit score weighs your positive credit history against the negative. If a lender finds that you’re financially irresponsible, have large amounts of debt, or carry maxed out credit cards, you’ll have a tough time obtaining finance, and pay more interest than you might have otherwise.
However, you shouldn’t throw in the towel just yet.
There is a silver lining.
With the right techniques and strategies, there are countless ways to boost your credit score, save money on interest, and improve your chances of being approved for your next loan.
Today we’re helping you to live your best financial life by sharing 5 of the easiest ways to improve your credit score, which will help you to:
- Quickly and easily boost your credit score.
- Supercharge your chances of landing a loan.
- Save $$$ and gain access to lower interest rates.
Up first? Let’s take a look at why now’s the time to give your credit score much-needed CPR:
Do you have a bad credit score? Here are 3 reasons you should improve it
The rewards for having a good credit score are more than just a feeling of accomplishment. In fact, they’re far more tangible than that. Having a good credit score can prove to be invaluable the next time you apply for a loan or credit.
The benefits of a good credit score include:
- You can negotiate a better deal with personal lenders on your credit, as well as other finance like debt consolidation loans.
- You can seek out the best deal among financial providers.
- You can ask if you’re eligible for any bonuses and benefits including greater rewards and lower rates and fees.
Sounds pretty good, right?
Better still, it isn’t all that difficult to do!
So if you’re struggling, use the following 5 techniques to quickly improve your credit score:
1. Pay your bills...on time
Ok, so this one seems pretty obvious.
It’s also absolutely crucial.
Bank loans and credit cards aren’t the only thing that affect your credit score. Your electricity and telephone service providers (among others) are also credit providers, and they’ll report delinquent accounts to credit bureaus.
Missing your payment deadlines on a few bills is a quick way to put a dent in your credit score. It will indicate that you are not reliable when it comes to on-time payments, so you need to pay them on time.
2. Dispute errors
Things can - and often do - go wrong, and people make mistakes.
After all, we are only human.
Unfortunately, if these mistakes involve your credit history, they’ll negatively affect your credit score and your ability to get a loan.
Thankfully, addressing these errors isn't difficult. You can quickly and easily access your credit report without affecting your credit score using a service like CreditSimple. Just log on and check your credit score online, right now, completely free of charge.
If you uncover and report an error, the company who filed the issue is obligated to investigate it, and it can be removed if you are correct. So make sure you report any errors you find, and follow up on the investigation process.
The major lesson here?
Don’t let issues that you didn’t cause hold back your creditworthiness.
3. Keep balances on credit cards and other revolving debt low
When you apply for finance, your potential lender will check how much credit you have available, and how much of your credit limit(s) you have used.
If you have credit cards or lines of credit that are maxed out - or close to it - your lender may read this as you being on the financial edge.
Why does this matter?
This will make lenders far less likely to lend to you, because they’ll view you as too much of a financial risk.
Can’t I just pay someone to remove information from my credit file?
The short answer? No.
While it may seem like a quick solution, don’t be fooled by companies that promise they can do this for you.
Information contained within your credit report is only ever removed if it’s proven to be incorrect, or if it’s out of date. As we’ve explored above, disputing errors in your credit report is a good practice to follow, and shouldn't cost you a cent.
4. Keep your credit card accounts open
This step may seem counter-productive when weighed up with the need to keep your balances low, but that couldn’t be further from the truth. In fact, closing down your credit cards won’t help to improve your credit score, and may actually harm it.
Here’s the deal:
Carrying maxed-out credit cards might be bad, but having credit card accounts open with little-to-zero balances will show a reliability and safety in handling money that has been lent to you. A low balance shows you’re financially responsible and pay back your debts on time.
The best part? Should something go wrong that affects your credit score, cash flow, or your ability to gain finance, having credit cards on hand for a financial emergency could prove invaluable.
5. Avoid making multiple credit applications
When you apply for credit, the provider will check your credit report and this enquiry will be noted on your report. Having too many of these enquiries from numerous credit providers can have a detrimental impact on your credit score.
Remember, this doesn’t just mean applications for unsecured or secured finance: phone, internet, and utility providers will also check your credit score as well. If you make yourself look desperate by triggering multiple enquiries, lenders may see this as you panicking as your credit score declines, so they’ll be less keen to lend to you.
As a result? Your interest rates go up, and your chances of being approved go down.
You have a plan, now it’s time to take action
All you need is one word to sum up the process of improving your credit score:
If you find yourself with a low credit score, this could be the result of poor discipline, little-to-no credit history, or a combination of the two. The only exception being unfortunate circumstances where something outside of your control - like the loss of your job - has damaged your credit score.
In any case, it will take diligence in knowing your credit score and development of financial discipline that will bring it back, improving your attractiveness as a borrower and lowering the interest you’ll be asked to pay.
By using the 5 steps we’ve explored above? You'll be well on your way to doing just that.