Give Yourself Some Credit: 4 Credit Improvement Strategies
Friday, November 29, 2019, 6:00 AM | Leave Comment
If your credit score has taken a nose dive, don’t worry. There are several things you can do to raise the score more quickly than you might think.
All you need is some will power and perseverance, and you can soon have the highest credit score you’ve ever had.
Here are a few basic strategies that can address the problem.
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Pay Bills on Time
Getting behind on your monthly bills or paying late each time can chip away at your credit score. Keep up with your monthly bills and track when they are due so you won’t be miss the payment due-date. You may be able to set up an automatic bill-payer account with your bank or another financial institution like a credit union so that the regular monthly payment is deducted without a need for you to do anything. Paying bills on time will also eliminate late fees and penalties.
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Stop Applying for Credit Cards
If you are receiving frequent credit card offers with low interest rates or small monthly payments, be careful not to keep opening new accounts and using balance transfers to reduce your interest rate or payment. While the offer may hold for several months to a year or longer, depending on your credit rating, after the preliminary period, your interest rate may shoot up higher than the one you have now. Besides, opening more credit cards may give your additional credit lines with which to rack up more charges, which will push your balances higher, making them harder to pay off.
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Balance Your Debt-to-Income Ratio
Your financial stability is based on several factors, including a debt-to-income ratio, which is basically the amount of debt you owe compared to the amount of income you bring in monthly. Ideally, you should earn far more than you spend. When that gap begins to narrow so that you owe more in monthly credit payments than you can afford based on the amount of money you bring home, your credit score starts to look iffy.
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Pay Off Credit Balances
Use part of your monthly income to pay down current credit balances. Paying more than the required minimum payment will help you pay off the balance quicker. You may be able to get an online installment loan with bad credit. This would enable you to transfer a credit card account to an installment loan with a fixed monthly payment and an established payoff date.
Start working to improve your credit score. Soon you will see results that will put you in a better financial position for whatever comes your way.
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