In today’s fast-paced world, where banking has expanded to every corner and lending is the primitive source of earning profits for banks, it has become hard for individuals and companies to maintain a good credit score. The credit score is a number which reflects the chances of a borrower to pay back. Nevertheless, credit score is strongly attached to the borrower’s history of reimbursing and Bank’s lending policies.
Let’s take a look at some tips to repair your credit score:
Keep an eye on credit card balances
More often, a borrower asks “how to fix my credit?” The answer to this question is to keep an on your credit card balances. The credit card score is highly dependent on you revolving credit and consumption of credit. The ratio between the two should not be more than 30 percent. In order to boost your credit score you need to pay your balances and maintain your ratio so that your credit score remains high. Another way to keep a good score is to consolidate multiple credit card balances into a personal loan. It would avoid higher ratio of credit consumption in all your credit cards and also facilitate the balance statement.
Pay down your bills
A little amount of credit card debt could do lot more damage than a large amount of student loan debt. Credit Score is dependent on how much credit card debt do you have in total. So it is highly recommended that you pay off your credit card bills in order to improve your credit score. You must also try to pay the bills within a month and select minimum terms in case you are opting for a personal loan in order to accumulate all your debts. Recently, it has been observed that employers are checking credit scores for giving a job. You can watch the details of bill presented by Senator Elizabeth Warren at msnbc news live. The bill is aimed at putting a ban against vetting employees on the basis of credit score.
Plan your loans
You must plan your loans according to your needs and requirements. Unplanned loans and unnecessary debts leave a bad impact on your credit report. You must not utilize all of your credit cards at once, rather you should take one or two loans at a time. It will maintain your credit score and also provides you the opportunity to make easy pay off. If you take unplanned loans, you will end up with a pile of loans on you and your credit score could suffer due to late payments. So plan your loans according to your needs and avail them thorough minimum channels.
Check your Credit Report
You must check your credit reports weekly or once in a month. Your credit report contains the data to be used for calculating your credit score. You must request the copy of your credit report and check it for errors and make sure that all transactions are familiar to you. You must also check that all the payments are listed correctly. If you find any error related to late payments, you must report it to the bank so that they could take appropriate measures to correct it.
Credit scores are dependent on many factors, but it solely depicts the credit worthiness of borrower. A borrower should take aforementioned tips into consideration in order to maintain the credit score. A good credit score helps in smooth process of loan requests and maintenance of credit worthiness of borrower.