How to Build a Healthy Credit Score
When applying for a loan, everybody wants to get the lowest interest rates. However, getting the best possible rate will only be possible if you have good to excellent credit. Check your credit report first before seeking out a personal loan, car loan or mortgage. If you found that your credit rating needs improvement, here’s what you can do:
Remove negative information. Negative information may be the reason for your poor rating. Make sure that your credit report contains no errors. If discover false information, send a dispute letter to the bureau that issued your report.
Do not maximize your credit limit. Keep your credit limit usage minimal. Lenders prefer clients who do not use up more than 50% of their credit limit.
Don’t close old accounts. If you plan to cancel a credit card, make sure it’s not the one that you’ve had for a long time. Closing old accounts is like deleting the oldest parts of your credit history. If your old cards have high interest rate, use it occasionally for small purchases and them off at once to avoid the additional interest and late fees.
Submit payments on time. Being prompt in submitting your payment can really improve your credit score. Timely payment makes up about 35% of your total score so even a single late payment can badly affect your rating.
Avoid submitting multiple applications to different lending companies. When applying for a loan or a new credit card, do not try to submit multiple applications to different lenders. This will only send a negative impression to lenders who may inquire about your report.
Call in advance if you’re going to be late. If for some unexpected reason, you cannot submit your payment on time, call your creditor in advance and ask for an extension of your due date. Request your creditor not to report it as late payment to protect your credit history.
Resources for YOU:
Liz Roberts is a freelance writer and loan consultant. The website BadCreditResources.com offers resources that specialize in providing bad credit loans and credit cards for bad credit.
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