Ladies, Got a Low Credit Score? Here’s How You Can Turn Things Around!
Having a great credit score can do wonders for you financially! Indeed, this is the three digit number that credit bureaus award an individual to determine whether or not they are worthy of credit.
Indeed, this score becomes one of the major factors that creditors use to determine whether or not you will qualify for certain credit applications throughout your life.
Despite its importance, many individuals fall short of getting a great credit score due to owning a lot of debts, as well as mismanaging their funds.
At times, such a situation can feel hopeless.
That being said, even if you have a poor credit score, you can always turn things around and gradually build it up.
Here are some of the ways in which you can do so:
Ensuring That You Make Timely Payments of Your Credit Card Bills as Well as Loans
When assessing the value of your credit score, one of the thing that credit card bureaus do is analyze the debt repayment history that you have so as to comprehend the behavior of your credit repayment.
Which makes it all the more important that you pay any outstanding credit that you have, regardless of whether it is credit card bills or EMI.
Additionally, the more you spend on your credit card, as well as making timely repayment bills, will ensure that your credit score improves without any interests being incurred.
Desist from Making Many Direct Applications for Credit Cards as Well as Loans
Any time you apply for a credit card or a loan, the lender in question automatically checks your credit records from the credit bureau. Such an inquiry is normally termed as a hard inquiry.
That being said, when too many inquiries are made in a relatively short period of time, it dictates that you are a credit hungry individual, hence damaging your credit score.
Indeed, you should desist from making a large number of loan inquiries from many lenders within the same time frame. A better option would be to first visit an online marketplace and assess the different options that are being availed to you.
Moreover, these platforms give you the ability to receive a free credit report, as well as get credit inquiries from them. These kinds of inquiries are termed as soft inquiries and do not affect your credit score.
Occasionally Check Your Credit Score to Look for Any Discrepancies
A credit score is one of the major features that lenders analyze prior to awarding you credit with your credit application.
That being said, it is advisable that one occasionally checks their credit report to ensure there are no errors present.
Minimize Your Credit Utilization to About 40%
The credit utilization ratio is the proportion of the amount of total outstanding credit card balance compared to the credit card limit that you have been awarded.
Indeed, quite a number of borrowers severely damage their credit score by using a higher portion of the overall credit limit. Interestingly, studies have shown that women that are in charge of both household as well as personal expenses normally have an unusually high credit utilization ratio.
That being said, the credit bureau usually checks the credit score of such individuals, and when they see the high credit utilization ratio, they deem it as a hungriness for credit.
Indeed, the chances of defaulting in the future end up being greater as compared to individuals who have proven to have judicious credit card spending.
So if you are one to consistently surpass the 40% mark, it would be wise to contact your credit issuer and inform them to raise your credit card limit to reduce your credit utilization ratio.
Be Cautious of Guaranteed Loans
When you take that step of becoming a guarantor, you put yourself in the process of repaying the debt in question. Unfortunately, in the event that the primary borrower fails to make payments or defaults, it can have a detrimental effect on your credit report.
That being said, ensure that you monitor your credit account, as well as the behavior of the borrower to prevent them from defaulting on the loan and affecting your credit card score.
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