Credit score is a very important thing in the world today. It is simply a number with three digits that the lenders really look at when they want to give you a loan or credit card. This is one of the most important financial aspects in life because once or twice, you will run into something that requires some urgent funds which will force you to get a loan, without a good credit card score, that might be difficult. Credit score gets better as the value goes up this means the higher the digit, the better the score.
Sometimes, due to some factors, your credit score might be very low making it hard for you to access any loan from any lender, this can be frustrating, but do you know you can effortlessly increase your credit score over time? It might take some time but if you start early enough, you won’t even notice how time flies. In this article, I will be sharing with you a few tips that will help you improve your credit score in very easy ways.
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Borrow what you can afford to pay
Late payment and failure to pay what you have borrowed is what lowers your credit score terribly. Many people use a credit card very mindlessly especially when they see new things they have never owned, they forget about the cost and go for them with their credit cards, and this leads them into debts they cannot pay.
Even borrowing a loan and not comparing their online rates by the use of money lender in Singapore can affect you because you will end up having high interest and in the long run, you will not be able to pay then it affects your credit score, if you fail to pay or even get late, your credit score will go lower. If you want to improve your credit score, make sure that you go for only what you afford, and this decision should be made by you not the lender because lenders sometimes take care of their business side forgetting about you. Check your income and expenses, plus the assets you have and make a decision of what you want to borrow based on that assessment.
Don’t get too many credit cards at the beginning
Before you get financially stable, do not apply for too many credit cards. Having a lot of cards will prompt you to use many of them, sometimes you might be convinced that they are for emergency but trust me, you can’t just keep them for emergency, you will take some of them for shopping, which is not an emergency, others you will use them to purchase very unnecessary stuff which will eventually land you in debts. If you have just one credit card, for example, you will use it wisely knowing that you only rely on it. Another thing is that, if you have many credit card inquiries, you will lower your credit card score compared to someone who only has a single inquiry.
pay your balances on credit card in full
If you can afford, it is wise that you pay your credit card balances in full every month; this can be very manageable especially if you were spending mindfully, if all you spent was within the limits of your income it means you will have no problem paying it at the end of the month. Having the lowest balances possible will help you to grow your credit card score. Another thing you will be seen as a responsible person who is able to pay back when you decide to borrow. Late payments as we said before can ruin your credit score; this is the reason why you need to pay off your balances in full to avoid such scenarios. With this you will improve your credit score drastically.
Keep your balances low
It is important that you keep your credit card balances low, you don’t need to always get everything with your credit card. Having a very large amount on your card may be difficult for you to pay them and even if you pay, you might end up paying very late. Late payment and failure to pay at all is what drags your credit score to the lower side. Just because you have the limit doesn’t mean you have to beat the limit, it is in fact advised by the financial experts that you should keep your balance below 30 percent of your limit, which will be safe for you. To manage this well, it is better for you to just have one credit card because the more you have, the more you spend. If you practice this, your credit score will steadily improve with time.
Make your payments in time always
Credit score is normally based on your responsibility in paying your debts, if you pay all your balance in time, it shows your responsibility and commitment in paying back your debts, and this will increase your credit score. To help you in this, you will have to give the payments of your credit card balances a priority and it should also be the very first thing on your budget when you get your income. The challenge here is that if you get late with your payment for a long time, the debt-collection agency will come in to recover the money, if you get such report on your credit card it will automatically lower your credit score. To manage this still, you will need to have as less credit cards as you can because if you have many of them, you will be having a lot of balances accumulating on each giving you a hard time to pay.