Credit scores help streamline our other financial ventures, such as getting a mortgage loan or a better insurance package. Therefore, it’s imperative that we improve our credit scores. There are different ways to improve your credit score. It can get us a better deal when it’s time for us to do things that require them. You need a strategy to maintain a positive credit score and build on it. This is what we will discuss in this article. With that being said, let’s get to it!
How to establish good credit and ways to improve your credit score
The process of building a positive credit score is an arduous but worthwhile endeavor. If your credit score is good, it will be easier for you to make major financial moves. These include moves such as applying for a mortgage loan or small business loan. However, if it’s not, you won’t be able to get loans if you need them. Thus putting a damper on your plans.
If you’re looking to improve your credit scores, here are seven things you can do:
Check Your Credit Score First
If you don’t know exactly what your current credit scores are? You will need to check them first. Only then will you know what you can do to make it better. You can apply to get a free credit report every year from the three reporting bureaus: Equifax, Experian, and TransUnion. They will do all the calculations for you. Hence, come up with a score that you can trust. This in turn will tell you what you’re doing well and what you need to work on.
Keep Track of Your Financial Records
While those who are born into a wealthy family might have better baseline credit than the rest of us, that doesn’t mean that we can’t get to that level as well. Therefore, if you have already filed for things like a credit card or a loan, you will need to keep a record of those transactions. It will provide evidence for your financial ventures, which will help you get a better credit score in the future. That makes it an incredibly important thing to do for those in their early to mid-twenties.
This is by far the most important thing you need to keep in mind. Pay bills on time, whether it’s a credit card loan, mortgage, student loan, or medical fees. Financial institutions keep track of everything, so if you don’t pay your bills on time, it will show in your history, which will put a dent in your credit score.
Pay in Larger Installments
Sometimes, paying more than the minimum amount in your monthly payments can help you get a more positive credit score, and it will help you to settle those debts sooner as well. However, you have to be sure that you can really afford to pay those extra dollars, as you still have to do it for months or years to come. It doesn’t make much sense for you to put your financial stability at risk for one extra mark on your credit scores.
Be Someone’s Guarantor
If you apply to be someone’s backer when they’re trying to get loans, that will make you seem more credible and responsible. However, you have to make sure that the person you support can stay on top of their payments; otherwise, backing them will cause problems for you.
Apply for an SCC
A secured credit card uses the money in your account as collateral, which means that you won’t be able to take out more money than the baseline collateral. However, it helps reassure financial institutions that you are traceable and that they will eventually get the money they’re owed.
Apply for Credit Builder Loan
These loans are made specifically to build credit, as the money you borrow is frozen and you can only use a limited amount each month. This will help you pay off loans easily, and creditors will tell credit bureaus that after every payment you make. It’s the quickest and easiest way to improve your credit score, but keep in mind that it won’t help you with other business ventures, so you’ll get nothing in return save for an improved credit score.
Aceltis Group is a professional mortgage company in New Jersey, and we can help you with all of your mortgage needs. Contact us today and see what we can do for you.