This post may contain affiliate links
How to Achieve a Clean Credit Rating?
Most of us are quite aware of our credit rating and we try to improve it as much as possible by behaving responsibly with our finances. The credit score, i.e. a number showing how well you manage finances, is the most important indicator potential lenders use when deciding whether to make any arrangement with you. It is a numerical presentation of the information contained in your credit report.
Needless to say, if you need to borrow some money, your lender will have to take into account your credit score, so that they could decide on the amount, period and the interest rate. That’s why you need to do everything you possibly can to fix a bad credit rating, if you have one. Companies such as Clean Credit offer professional assistance to companies and individuals wishing to get a second chance with their finances, and it might be a good idea to consult experts on this matter.
So, next time you try to get an insurance contract, it’d better be with a good credit rating. Not only will you get the deal you want, but you’re also more likely to be offered better conditions, too. So, what are the steps that you can take in order to achieve clean credit rating?
Pay your bills on time
Being punctual with your payments contributes to around one-third of your credit score. Regardless of whether we talk about credit cards or other bills, paying at least the minimum each month is much better than making no payment.
Check your credit reports
You need to be updated with your credit reports and you can hire a reporting agency to do this for you on a regular basis. Knowing how you stand is vital when it comes to making decisions about your future actions.
Maintain a variety of credit types
If you’ve paid off a student or a car loan, while regularly servicing your credit card, all potential lenders will feel more positive about your request. Your history will show them that you take your finances seriously enough.
Pay off debt in collections
This is another useful tip, because with a single payment, no matter how difficult it may be to make it, you can resolve your debt collection.
Get a personal loan to pay off credit card debt
Another way of improving your credit score is by taking out a personal loan to pay off your credit card debt. You can expect the interest rate here to be lower than the one your credit card company is charging you, so it makes perfect sense to arrange such a deal.
Avoid many new credit accounts or credit cards at once
You shouldn’t open too many new credit accounts at once because you would be reducing the average “age” of your account, thus lowering your credit score. Similarly, you shouldn’t try to get many new credit cards at once, since your application would trigger several “hard pulls” about your credit history, which would also have a negative impact on your score.
Keep credit balances low
It’s advisable to keep your revolving credit balance under 10 percent of your total available credit, because any higher percentage would have a negative effect on your credit score. Basically, you have to show that you’re not afraid of borrowing money, but that you are very careful and responsible towards your obligations.
With so many options to borrow money, one can hardly complain about a lack of sources. What can be a problem, however, is whether you can get a loan at favorable terms and condition. In order to be eligible for such arrangements, your credit history and rating have to be excellent, which means you have to give them the attention they deserve.
Thank you Dan for this great post! Dan from the greater Sydney area, born and raised in Liverpool. After high school, I went to the University of Sydney where I got my masters degree in banking and finances. I worked as a payments officer for nearly ten years in banking and international payments in the Australian banking sector. My hobbies include soccer, running and watching Netflix. https://bizzmarkblog.com/
I’d like to add that Credit Sesame has been a great resource in my journey in improving my credit score. I now have an excellent score thanks to the up to date information that they provide anytime I log on.
More posts on improving your credit score you should check out.
Get your FREE EBOOK!!
20 Ways to Improve Your Finances in Under 20 Minutes