Most of us will need to borrow money at some point in our lives; whether to go to university, buy a house, or just to get through a particularly tight financial period. But having poor credit scores will affect approval for loans, and if approved, subject you to the highest applicable interest rates. Friends often ask me for advice on how to achieve and maintain good credit scores. Here are my top five tips for improving scores:
1) Pay your bills on time and as early as possible. Unfortunately, some lenders are ambiguous about the repayment terms for their loans resulting in missed deadlines and increased interest rates.
2) Spend within the limit on your credit card. Going over the limit is likely to have a negative impact on your score.
3) Try not to submit too many credit applications around the same time. A large number of lenders asking the credit rating agency about the same person within a short period of time may raise a red flag and cause your score to be significantly reduced.
4) Ensure you’re actually building credit history. You may think that by never borrowing money you’ll have a good score, but that isn’t the case. Instead, it’s seen as insufficient evidence of your ability to repay loans.
5) Consider a stopgap loan for bill repayment. Sometimes it’s beneficial to take out a short-term loan at a lower interest rate in order to consolidate and pay off other loans. This can often salvage your credit score or save you from interest rate hikes on other Bad credit loans. However, always use a responsible lender like ferratum.ca. And be sure to set a realistic time period for repayment.
By following these five tips, your credit score will be good as new in no time.