Why is credit score important?
In the event of you planning to avail a home loan, it is necessary for you to discover your credit score from a trusted source so that you could beforehand, get to know the possibility of availing the loan, or even if you could easily avail a loan whether the interest rate offered to you would be a nominal one or not. Yes, your credit score means a lot to your financial planning and future because only with this 3-digit score the lending institution could measure your credit risk level and from there infer your ability to repay the loan amount on time.
Not only such financial institutions, even your home insurance provider, auto insurance provider, utility companies, phone service provider, your apartment leasing office and much more scrutinize your credit score to understand, how well on time you make your credit payments and accordingly, decide the monthly fee or security deposit that may be too high or nominal. Hence, maintaining a good credit score is essential so that you enjoy a healthy financial status all the time!
Paying your bills on time
It is an easy task, isn't it? Yet, how many of us do it on time and rather consider pride in making those late payments? If you are inclined to boost your credit score then, do vow to never do that again because all your late payments might not annoy your credit card company to confiscate the card from you but, surely these acts are causing definite negative impacts on your credit score, thus, causing it to decrease drastically. Again, if you had missed makingthe payments on time due to various valid reasons.
Avoid too many credit shopping
Whenever you make a request for a new credit petition, your provider is most likely to inquire your credit report and too many of such 'hard inquiries' would drastically reduce your credit score, which is, I needn't say, not good for your financial future. Therefore, the next time you decide to avail a store credit card for a mere 5% or 10% discount, understand how it is going to impact your credit score and hence, refrain availing too many of them to save your most-needed credit score!
Don't overuse your card
Frequently overusing your card or even using up to the maximum credit limit would increase your 'credit utilization ratio' that not only portrays you as a profligate but also impacts your credit score negatively. If, however, you know that you are spending wisely or cash payment is not a feasible option for you then, the alternate way to reduce your 'credit utilization ratio' is by breaking your payments, such that paying twice a month or so that makes your running balance conveniently lower.
Generally, the credit score is a 3-digit number ranging usually from 350 to 800 points, according to the popular and widely used FICO model and anything above the 700 points is considered to be a good credit score, which every one of you should be aiming to attain for a peaceful financial living. However, if you have just realized your credit score does not belong in the ‘good’ range and yearning to find the magical solution that could drastically improve your score then, you are certainly misguided!
Don’t lose your hope because I’m not saying you could never boost your credit score but, only saying that it could neither happen magically or overnight and instead, it is a steady and continuous activity rather being a single time event. Therefore, as goes the saying ‘little drops of water make a mighty ocean’ when you follow the easy and yet, the significant 5 steps mentioned below routinely in your lifetime you could not only boost your current credit score but also maintain the desired range, all the time and every time!
Review your credit report
Your credit report is that crucial statement which holds the history of all your credit transactions and hence, at least once a year, make surethe credit report of yours is a precise one, to avoid low credit scores. Therefore, list down all your credit payments and their due dates and set a reminder so that you do not miss one. please do intimate your credit company and, if at all you were a punctual payment-maker earlier, they might forgive your late payment and thus, saved your credit score too!S
Don’t overuse your card
Frequently overusing your card or even using up to the maximum credit limit would increase your ‘credit utilization ratio’ that not only portrays you as a profligate but also impacts your credit score negatively. If, however, you know that you are spending wisely or cash payment is not a feasible option for you then, the alternate way to reduce your ‘credit utilization ratio’ is by breaking your payments, such that paying twice a month or so that makes your running balance conveniently lower.
Ask for a credit limit hike
Having the required credit utilization ratio, not exceeding the ideal threshold of 30% would improve your credit score positively for which another better option is to request your credit company to increase your credit limit. If you are a loyal customer and an on-time credit re-payer the company would definitely bewilling to satisfy your plea that would significantly improve your credit score.