Credit scores are a huge deal when you start managing your expenses. From lenders to banks, many financial institutions check your credit history to determine terms and conditions for loans, insurance, and other useful services. That’s the reason why you need to learn how to increase your credit score!
The best way to have a good credit score is always maintaining a healthy financial balance, of course. But we know that, sometimes, things can get complicated, and your rating drops before your eyes. If that’s happened, and you want to go back on track, learn some tips with OneBlinc!
What your credit score shows
In order to buy a house, most people need to get a home loan from a bank. When they go to the bank and ask for a loan, the institution runs a credit score check to decide whether it is possible to lend that loan or not.
If the bank finds a good credit score, there is a great chance to get a deal with very nice conditions. The worse the number the credit report shows, the fewer benefits people receive. If the credit rating is bad enough, some financial institutions might even deny the loan.
That is one of the many reasons to learn how to increase your credit score. Bad credit history can not only delay your plans but also put them to a halt completely. Financial institutions use that information to predict how good of a payer you’re and how trustworthy is your balance.
Each financial institution has its way of calculating your credit score through your credit report. Consider these key points:
- payment history;
- credit available;
- credit history;
- types of credit accounts;
- new credit accounts.
Improving your credit score
Now, it’s time to work on how to increase your credit score and reach every financial goal you aim for. To help you with that, we prepared four steps that’ll improve your credit score in no time! Some are easier than others, but they’re your first goals to reach your future goals.
1. Pay off your debt
Debts are a great part of why many credit scores in the USA go down. Thus, one of the very first things you’ll have to work on is paying off everything you owe. This goes for small and big investments: from your credit card to a car loan, your credit usage is very important for your rating.
Of course, paying off a big loan is not an easy thing, so just make sure all your small expenses are always covered. Avoid interests and, if needed, try and make a deal with the financial institution you owe to. This might make things easier for you to rule debt out of your list.
2. Pay your bills always on time
Your payment history makes up 35% of your credit score. All your monthly payments are tracked and shown in your credit report. If you miss a payment, it can damage your rating and even bleed into other important percentages considered by the score system.
Then, make sure to have all your monthly expenses well-organized in order to manage them correctly. You can do that by creating a spreadsheet or even finding financial management tools online that’ll organize that for you.
3. Avoid hard credit inquiries
Whenever you’re looking for a loan, the financial institution most probably will do a credit score check on you. However, there are two types of credit score checks: hard inquiries and soft inquiries. Both are very common, but you should be careful with only one of them.
Hard credit inquiries, or “hard pulls”, are a more thorough check on your credit report. Because of that, it not only appears on the reports but can also affect your credit negatively. It’s as if they “cost” a little bit of score every time they’re used.
Because of that, you need to be very strategic when choosing which and how many hard inquiries you’ll allow. Too many of these can not only affect your score but also make other companies uneasy about lending you money.
4. Know your report
The final and actual easiest way of making sure your credit score is as good as it can be is checking your credit report now and then. Knowing what’s being shown to the companies that will calculate your score is an essential part of managing your rating.
There are three major national reporting agencies. You can request one free credit report yearly from each. Choose when you’re going to do that wisely. If you get your report and notice something’s off, don’t hesitate in opening a dispute. You can check more details on this matter at the USA government website.
At OneBlinc, you’re more than your credit score
Now, you know how to increase your credit score, but always remember that OneBlinc sees people as they are: people. Here, you’re more than your credit score. We have different technologies that go beyond that rating in order to help you get the loan you need. Learn more about us!
Unexpected things happen more often than we would like them to. That’s why OneBlinc is here to help, whether you have an emergency or just need that extra cash to go through the end of the month. We believe in people, and we understand that everyone might need money someday, somehow.