How to Improve Your Credit Rating

A credit rating is one of the most important things in life, and it has a huge effect on your finances in a number of ways. Your credit rating will go a long way to determining whether you qualify for a mortgage, a homeowner loan or a range of other things, which means it’s important to try and keep yours as healthy as possible. The problem is, most people have no idea what their credit rating is like, or indeed how to improve it. We’re here to help, with a few suggestions for getting your rating as high as it can be.

Reduce your debts

This might seem like an obvious one, but it’s worth mentioning nonetheless. If you have credit cards that have been building up large amounts of debt then it’s time to try and get rid of it. Try and work out a personal budget that details all of your outgoings and put aside some money for reducing any debt you may have. You’ll be surprised how much of a positive impact this can have on your score.

Deal with late payments

Missed payments are one of the most common causes of poor credit ratings. If you miss a payment then you should attempt to get in touch with your card company straight away, as they may agree not to report it if you have a good history with them. Even if you can’t avoid this you should try and take care of the payment as soon as you can in order to minimise any damage.

Try to limit credit checks

Unfortunately, people checking on your credit rating can have a detrimental effect on your score. This means you should try and limit your applications for credit as much as possible, or group them together so that credit agencies consider them as one inquiry. You should also avoid opening up more than one or two credit cards a year, as this will also bring your credit rating down.

Be timely with your bills

If you are regularly on time with your monthly bills then this will likely have a positive impact on your score. If you are someone who has trouble keeping track of bills then you can always create a reminder or some type of calendar which will help you to pay everything on time.

These are some of the ways you can help to boost your credit rating, giving you more chance to be accepted for mortgages and other types of loan in the future. It never hurts to stay on top of your finances, and by being frugal and buying less non-essential items you should find that this has a knock-on effect for your credit rating.