5 ways to improve your credit score
Your credit score is very important to having sound financial stability. Having a healthy credit score could be the difference between you being accepted for different types of lending such as getting a credit card, mortgage even applying for normal bank loans. It is very important that you ensure that your finances are in a healthy financial state as much as you can. Here is 5 practical ways to improve your credit score.
Don’t borrow more than you can afford
This ratio is going to determine whether you’ve taken out too much debt and are a risky customer or whether you have too little income to support more debt. It is basically all of your recurring monthly debt payments (do not include variables like utilities and groceries) and divide it by your total gross monthly income. The ratio should be less than 36 percent to help you have a good credit score. If you need to shed debt to get to that magic number, pay off accounts (but don’t close them). The more credit you have available that you are not using the better it looks on your credit history and your final score.
Pay every time on time
It can be tempting when you’ve got emergencies to shovel a great deal of money and splash the cash to impress people for the sake of it, however this can be a dangerous idea. All debts should be paid on time all the time otherwise lenders will see you as a risk to future borrowing. Some payments however do count more towards your credit score and these should be a priority. Mortgage payments for starters so do ensure that this is paid first and foremost.
Watch your credit history very very closely
Identity theft is on the rise so make sure that your passwords and personal banking codes are kept to yourself in case of fraud. This is your responsibility to ensure that no fraudster is copying your details. This checking will ensure that the banks will look at your lendability in a more positive light.