Having a good credit score can mean the difference between getting a home loan or buying the vehicle you need for work. The international credit union works on very specific criteria and many people don’t know that there are very easy ways to improve their credit score without much effort.
It can take a long time to build up a credit score and you generally need to have some kind of pre-existing credit to show financial institutions that you can manage your finances properly. Here are some tricks you might have never heard of that can passively improve your credit rating
Limit Credit Applications
Buying a house or a car can take months, and in most cases, you have to apply for a loan with the bank as you are looking for your new purchase. Bank loan applications are also only valid for a limited period so if you can’t secure the house deposit in time, you will have to re-apply.
The issue here is that applying too often harms your credit rating. Each application you submit puts an inquiry on your name, and the timeframe in which you apply must be kept short. If you have been applying for three months with no joy, don’t apply again for at least another six. It can take some nifty logistics on your end but this is the biggest way people sabotage their score with the credit union.
Maintain Your Minimum Installments
Each account or loan you have has calculated a minimum amount you need to pay each month to maintain good standing with the bank. As long as you can pay that lowest amount each month, your credit score will remain intact. You mustn’t miss even one single payment, as this instantly puts an ugly red flag on your score report.
Your payment history accounts for 35% of your total credit score, with credit usage next at 30%. If you are looking for expert advice to manage a bad credit score, Affiance Financial offers a wide array of financial planning services to cater to any situation.
Confirm The Details of Your Report
One of the most overlooked aspects of a credit report is your outstanding debts and credit accounts. If you have recently made a large payment or settled an account, have you checked that it has been updated with the credit union?
It can take months before your updated payment details reflect on your credit score report even if you have closed an account. If you find any discrepancies like this, the credit union is more than happy to have a look into your account and rectify any mistakes. Additionally, closing any smaller accounts as soon as you can is the best remedy for a bad rating.
Your credit score reflects the anticipated risk you are as a client, so having a good score will open up doors to more opportunities for credit. If you start working on improving your rating now, you might find that a home loan is much easier to be approved for in the next few years.