Quick and Effective Ways to Improve Your Credit Score

 

The importance of credit rating needs no mention as more and more people avail loans nowadays. However, credit rating is no more a matter of borrowers and lenders. Its scope is increasing, and do not be surprised to find that even employers are using it. Nowadays, employers are also judging the financial stability of the person they want to employ. They see financial stability as a sign of one’s ability to handle responsibility. The more financially stable you are, the more responsible you appear to the potential employer. It reflects your attitude towards life. Many companies are using this newly found yardstick to assess job seekers from a different angle, and in a way, responsibility level now gets a measurable index.

Improve your credit score

Home loan applicants are most sensitive to credit scores because unless you have a credit score of 760 and above, you do not get the best interest rates. Apartment buying requires a credit score between 600 and 650, and if you target expensive apartments, be ready with a higher score. The problem is that life is full of uncertainties, and credit scores keep fluctuating with occasional dips. Whenever it happens, the sooner you start damage control, the better it is because repairing credit scores and improving the same takes time, effort and discipline. It never happens overnight, but you will get there only if you keep at it.  Some well thought out methods of improving credit score is the subject of discussion of this article.

How bad is your credit score?
Even if you find your credit score to be below par, re-check before you accept it. In some instances, credit reports, generated by the major credit bureaus, may not be entirely error-free. According to The Federal Trade Commission, at least five percent consumers have detected errors in one of the reports of the three major credit bureaus. Accepting the fact that humans are prone to error, there is no reason why you should be surprised. The chances are that there is a mix up of accounts due to similar names and it reflects in your report. Sometimes closed accounts show up as still open and negative items that should not be there are still in place, and it skews the credit score too. To make corrections, you can take the following measures.

Scrutinize credit reports

Obtain free copies of complete credit reports from the three major credit rating bureaus. You can download it from the authorized website. Check the reports carefully to detect errors in balances that you have already paid, see if there are any duplicate entries and note the items to confirm that it all belongs to you. Review every item and pay attention to every figure that appears in the report.

If you detect any error, bring it to the notice of the credit rating bureaus because there is a system in place to register disputes. Avail the online facility to file disputes and take help from a non-profit consumer credit counseling agency to guide you in this matter. You can hire professional companies to do the job, but think about spending only if the problem is complex and it is worth spending. Rather, using the money to pay off debts might be better to improve credit scores faster.

Make timely payments a habit

It does not matter if you have faltered earlier in making credit payments, but from now make it a habit of paying on time. Register for auto-payment of your credit bills so that you do not have to remember the time of payment as the system takes care of it. However, if you prefer to pay by check, you need to keep a tab on the payment dates every month so that there is no miss.

Avoid delinquency

Missing payments can have disastrous effects on your credit rating, and you must avoid it at all cost. It will take seven years to erase late payment record from the credit score. If you are unable to settle the bill, at least do not miss making the minimum payment on time. Missed payments cause the most damage to the credit score. Instead, be smart and make strategic payments so that the credit score is unaffected.

Avail fewer credits

Set a target for credit utilization and take measures to achieve it. A credit utilization target of 30% is quite acceptable. Setting the target creates a boundary within which you must start living. Credit utilization is the ratio between your total credit balance and the total credit limit enjoy. It has a direct impact on your credit score hence be cautious about it. If your credit utilization is higher, it means you are borrowing too much, and repayment of debts can become a problem. There are a few things to do to restrict your credit card utilization.

Pull down balances

Since improving the credit score is your goal, the only way to do it is to wipe off balances as fast as you can. Even if it means using your fund reserves, do not hesitate because there is no other way of pushing up the credit score faster. It is a calculated risk that you are taking by laying your hands on the reserves because you might have to take a loan once again if there is an interim emergency, but it is worth doing.

Take a retirement plan loan

Address the issue of knocking off balances aggressively and think of taking a retirement plan loan. These loans come with lower interest, and they do not get informed to the credit bureaus. Thus, the loan that you take has no effect on the credit score. Use the money to wipe out the high-interest loan balance and boost your credit score. Whether you can do this depends on your ability to continue with the loan for five years.

If your credit score is not too poor, you can close the gap effectively by using these methods. However, if you want to avail title loans to pay off other debts, then go to https://bayareatitleloans.com/, the company that borrowers have liked and trusted for years.