4 Tips to Improve Credit Score
4 Tips to Improve Credit Score
It’s a new year, and a new you. Welcome to New Year’s Resolution season! Got a goal you never got a chance to attain? Now you can think more about it and take action to make your dreams a reality! If you’re ready for a new you, then use these best tips to improve credit score in 2019!
One of the most popular New Year’s resolutions is to improve your financial standing. This could mean getting a new job, starting or growing a business, or doing a better job by saving money.
A big element of financial responsibility in new year’s resolutions is to improve your credit score, as it’s a numerical measure of your creditworthiness. Many American adults ignore their credit score at their peril: your credit score can be one of the easiest things you can improve! Best of all, you can make sure that your credit score only keeps improving over time.
Benefits of a High Credit Score
So why should you even focus on your credit score in the first place? The main reason is that an 850 – perfect credit score will help you achieve financial milestones. It will help you get a house, start a business, and even get certain jobs.
Improve credit score gets you to access to additional credit at a lower interest rate. It costs less to borrow money, leaving you less liable to be trapped in a debt spiral.
A high credit score allows you to qualify for mortgages at lower rates, making it easier for you to afford your dream home.
Also Read: How To Prepare Your Credit For A Mortgage
With a high credit score, lenders, landlords, and even employers will see you as more trustworthy. There’s no reason why you shouldn’t focus on having a good credit score.
So, how do you improve your credit score? Here are some of the best tips for improving your credit score in 2019. They’re simple, and some of them can be done by the end of January!
Here are the best tips to improve credit score!
Tip #1 – Snowball That Credit Card Debt
If your credit score is low, then you can almost be sure that your credit card debt is at least partially to blame and you need to know what exactly need to do if you’re in deep credit card debt?
Large amounts of credit card debt could be what’s keeping you from having excellent credit: even if you make your minimum payments on time!
So what does it mean to ‘snowball’ your debt? Snowballing debt is the act of paying off the smallest balances first, then working on the larger balances later. You pay the minimum payments on large balances while paying down the small balances aggressively, all the way down to 0.
This will free up additional credit, it will lower your utilization ratio, and will ultimately improve your credit score very quickly.
Tip #2 – Take Care of Collection Items & Items in Default
Collections items and items in default are some of the most impactful negative (or derogatory) items on your credit report. Having just one of these can bring your score down dramatically.
Items in default need your immediate attention. If it’s in default, it could move to collections.
When items move into collections, that’s bad news bears: items in collections can no longer be paid to the lender. In this situation, you will need to negotiate with the lender to avoid the item going into collections.
For items in default, it’s ideal to settle for an agreeable amount or set up a payment plan with the lender. However, some lenders will not accept it unless it is paid in full. For issues like these, it may be helpful to hire a debt relief company to negotiate on your behalf.
Items in collections often stay on your credit report, even if you’re paying them down. With collections items, it can be best to settle with the debt collector with the agreement that it will be reflected on your credit report as an item no longer in collections.
Ideally, you would have the debt collector settle while removing the item from your credit report. However, there are other arrangements. Learn more about items in collections here!
Tip #3 – Set Up Payment Plans for Your Largest Loans
Got huge amounts of debt, but are having trouble making the payments? You may have to renegotiate a payment plan.
Your largest loans impact your credit score mainly due to how much they affect your amounts owed.
If you are missing payments because you can’t afford them, call the lender and negotiate a payment plan. A lender would much rather get some of their money back than let it go into default, or worse, write it off & put it in collections.
The best payment plans have reasonable interest rates (although you may expect to pay a larger rate than you are now) and have a specific completion date.
Tip #4 – Get Your Free Credit Report & Dispute Any Errors
One of the biggest problems people have with their credit score is that they don’t know why it’s so low. They just check their score without looking into the details of their history.
It’s so paramount to get a credit report, and it’s even offered for free by the United States government. https://annualcreditreport.com
Once you get it, review it closely and look for errors. Common errors include:
- Clerical errors (mistyped dates, duplicates of loans on the credit history, and other odd-looking things)
- Loans that are in your name, but don’t belong to you
- Fraudulent items
Even if you don’t think there are any errors, there might be items on there that shouldn’t be there. The Credit Pros is here to help you out.
We will review your credit report and look for items that, by law, are no longer allowed to be on your credit report. We dispute these items and make sure they’re removed, giving you a fair chance.
Removing derogatory items from your credit report is going to see a drastic improvement in your credit score. For that reason, it pays to have credit professionals check over your report and make sure everything is on the up and up.