Published On: Wed, Jan 9th, 2019

Back to Basics: 5 Powerful Steps for Improving Your Credit Rating

Credit is a lifetime thing. It stays with you but it doesn’t have to be something that you worry about. Here are 5 steps to improve your credit rating today:

Steps for Improving Your Credit Rating

  1. Track your credit report. Make sure it’s up-to-date.

Good credit is important. It is what will approve you for cards, loans and other credit you may need. To improve your credit rating, keep your account opens even when they’re not in use. This can help with your credit utilization ratio. A good credit score usually ranges somewhere between 670 to 730. The score ties into what credit card or loan is available to you. Make sure you keep track of how your credit is doing and that all the information you have is the most updated. This will also help in speeding up your loan process in the future.


  1. Maintain an active account

Banks and lenders don’t like borrows with zero credit history. Without any credit history, it gives lenders no assurance that you’ll be a responsible borrower and pay your loans on time. Without an active account, this puts you in a high-risk category for loan applications. You need a track record of responsible banking which reflects your ultimate credit score. Hence, make sure you have to check accounts that are active and in good standing. It doesn’t have to be big, even having a small phone plane or internet plan under your name helps. Open an account and apply for credit cards that are focused for people with bad credit. Learn more about these cards created to help improve credit ratings. From there, make sure to manage these account well and be responsible for them.


  1. Don’t fall into a negative listing.

When you’re borrowing money, you need to avoid the long-term damage of bankruptcy, court judgments, and payment default. If you fall into this, you can be listed negatively for up to seven years and greatly affect your credit. If you’re wrongly billed make sure you dispute it to protect your credit. If you can’t make a repayment on time, consider talking to your lender. It is better to negotiate than to avoid paying as that’ll plunge your credit into the negatives.


  1. Avoid credit inquiries

Every time you apply for credit, the provider will inquire about your credit report. Every inquiry is pinged by the institution and too many inquiries is a sign to lenders that you’re constantly needing new ways to get credit without managing your resources properly. Apply for credit only when you know you’ll be approved and it is something you need. There is no need to apply for a bunch of credit cards when you only need two.


  1. Timely payment of your bills

Lastly, pay your bills on time. This is how you improve your credit report. Overdue payments will stay on your credit report so make sure you pay your bills each month. This will also help in avoiding any penalties or unnecessary interest that comes with late payment,


Even if your credit history isn’t up to par, with the right steps, you can improve your rating and be on the lookout for a loan that’ll help achieve the milestones you want.