3 Ways to Get Your Credit Score Back on Track

3 Ways to Get Your Credit Score Back on Track

If you are planning to apply for an auto loan, a mortgage or a loan to start your business, you may be turned down if you have a bad credit score. In simple terms, credit score is a reflection of your creditworthiness. It’s also a measure of the extent to which you may be considered to receive NowLoans or financial credit, based on your reliability in paying it back in the past. Credit scores are calculated from a range of 300 to 850. The higher the credit score, the greater your creditworthiness. Fortunately, you can rebuild and get your credit score back on track, using various approaches and interventions. Here are some proven tips that can help to raise your credit score.

Clean Up Your Credit Reports

All financial institutions, including banks, NowLoans companies, lenders, and credit union companies, report the debt you owe, as well as your payment history to credit reporting agencies such as TransUnion, Experian, and Equifax. Considering that financial institutions and lenders deal with millions of customers and the credit reporting agencies have to file millions of reports every month, mistakes are bound to occur. While most of the mistakes that occur are minor, they can sometimes be large enough to affect your credit score negatively. Therefore, the first thing that you should do when trying to get your credit score back on track, is to obtain a copy of your credit reports. Once you obtain that copy, you should go through it carefully to ensure all the information on it is accurate and up-to-date. In case you encounter any errors, you need to contact your creditor immediately and request them to rectify the errors. In case there is a dispute, then you should report the issue to the relevant authorities, follow it up and ensure it’s resolved as fast as possible.

Maintain Optimal Credit Utilisation

Lenders, credit union companies, banks, NowLoan.co.uk , and other financial institutions, also use your credit utilisation rate to assess your credit rating. Credit utilisation rate refers to the ratio of credit card debt limit versus the debt you have on that card. It’s highly advisable to maintain a credit card utilisation rate of approximately 30% or less. If possible, you should maintain it at 10% or thereof. For instance, if you have a credit card debt limit of $9,000, you should try to keep your debt down to $2,000 as much as you can. If you’ve already accumulated a debt of $2,000 on this card, you should explore other options and halt increasing the debt.

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Improve Your Payment History

Your payment history also affects your credit score. Therefore, paying your bills on time and avoiding late payments as much as possible, will go a long way in getting your credit score back on track. Paying bills on time requires a great level of discipline. Unfortunately, there is no way around it. One of the easiest means of doing this is by setting up automatic payments. You can also set notifications, which will remind you to pay the bills before their due dates. Once you do this, you no longer have to worry about writing checks or getting your bills paid on time.

Closing Remarks

Without a doubt, your credit score will affect your life in different ways. Therefore, if you have a poor credit score, you need to take the appropriate measures to get in back on track. And if you do it right, your credit score will eventually improve and you may qualify for that loan that you wanted to purchase a car or start a small business.

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