Are you always rejected every time you apply for a loan or credit card? There are many factors which can affect bank approvals. One of the biggest and most important of them all is none other than your credit score. If you are confused why you always get declined when you apply even if you met the rest of the necessary requirements, your poor credit score is probably the culprit. This reading will help you in finding the easiest ways to improve your credit score.
Your credit score can say a lot about you. This reflects your payment habits as well as how responsible you are when it comes to repaying debts. On top of it all, your credit score gives banks a glimpse if you know how to borrow money or not. It is the reason why apart from monthly income, banks also check your credit score prior to approving your card or loan application.
To save you from the heartache of being declined yet again, below are the easiest ways to help you improve your credit score for the better.
Say No to Late Payments
This one may be easier said than done. After all, there will always be instances when paying your monthly dues might be possible, either because of financial incapacity, emergencies, or simply forgetting about them. Culture the habit of paying bills early, or you can also pay two times a month. If you plan to pay only the minimum, you might want to reconsider. When you only pay the minimum amount, any remaining balance is going to be carried over to your next billing cycle with interest included. Ensuring that you spend just within your capacity can go really long way in credit score improvement.
Apply for a Credit Card ASAP and Be Responsible With Its Use
Among the best means of showing banks that you are financially responsible is by getting a credit card early. Give off a good impression through using your card for purchases you can pay off right on time. In addition, it will be great to put a buffer in your credit limit in the event that you have to divert funds somewhere else.
Don’t Go Beyond Your Cards’ Credit Limit
Having a balance higher than your current credit limits is considered as red flag by many banks, not to mention that it can make your credit score go downhill. This balance usually includes interest payments. If you are almost near your credit limit and it is not possible to pay the required balance, you can convert big transactions into installments instead.
Keep Your Debts to a Minimum or Pay Them Off
Obviously, your credit score will improve if you pay off your previous debts. However, if it is currently impossible for you to settle all of your balances in a single go, you can try keeping it to a manageable or minimum amount.
Request for Credit Limit Raise
If you cannot pay off all of your debts, you can ask your bank to raise your credit limit. Credit reports depend on percentages so higher credit limit will lead to lower credit utilization, that is, if your expenses stay within the same range.