Almost everyone is aware of the impact a credit score has on their ability to borrow money. Without a high rating, you won’t get the best offers on mortgages or credit cards, two things that you will need at some point in your life. That means your score is essential, as is taking the effort to rebuild it.
Unfortunately, improving it isn’t the easiest or most enjoyable process in the world. If anything, it’s boring, which is why many people often fail to reach their targets. However, it doesn’t have to be this way if you understand the sneaky ways to shoot up the ladder! Credit scores are really important and determine a lot of things that you will need to buy in your life, such as a new home, where credit scores are highlighted on things like this home buying tips guide (click here), purchasing a car, and other big expenditures that you will need to buy throughout your life.
1. Find Out the Closing Date On Credit Cards
The due date (i.e the date the amount owed to your credit card supplier must be paid) and the closing date are two different things. The former is self-explanatory and usually takes precedent in peoples’ minds. However, the latter is essential as it impacts your credit utilization ratio. In short, if you pay the debt after the closing date, your score might still be high since your utilization ratio will be high. Finding out when issuers report your credit to the credit bureaus enables you to pay before the closing date and avoid the problem. Experian has more.
2. Raise Your Credit Limits
Your credit ratio is the amount of credit you are using compared to the figure you have available. The lower it is, the better it appears on checks because it means your exposure is lower. Therefore, if you’re using a lot of the money card companies are offering, you won’t make a dent in your score, not even if you’re paying it back regularly and on time. Instead, you should raise your credit limits and automatically boost your utilization ratio. The key is not to be tempted by the extra funds.
3. Buy A Car On Finance
Of course, it goes without saying that you should be able to afford the repayments, not only now but in the long-term. However, those who can get more bang for their buck improve their credit score. Why? New Roads Auto Loans says the easiest way to show you are trustworthy is to pay back debt. But, you don’t want to invest in anything you don’t need as it is risky. A vehicle is an ideal compromise as you always need a car to get around. And, driving is fun, much more enjoyable than collecting coupons!
4. Pay Off Arrears Cleverly
Finally, don’t assume that all debts are created equal because they aren’t. Some have a bigger effect on your credit score than others. As a result, they are the ones you must focus on when it comes to paying off arrears and limiting your risk. For instance, if you have two credit cards, it’s imperative to target the one with the greater utilization ratio, particularly if the other one is quite low.
Boosting your credit rating doesn’t have to be overly complicated or difficult. You can do it by simply being strategic and mixing up the types of arrears in your books!