Your credit score plays an important role in your life. It can help you get on the right path to financial success or, conversely, push you off course. From the credit history may depend on the possibility of buying an apartment or a car in the future, reducing the rate on a particular loan. If you have a bad account, then in the next few years you can pay an extra thousand, or even tens of thousands of rubles because of the high interest on the loan.
Fortunately, there are a few simple steps you can take to start building a positive rating in a credit report. Here are five ways to improve your credit history that you can apply today.
1. Pay your bills on time
One of the most important factors that affect your outcome is timely payments on a loan and other financial obligations. When you have a lot of different bills that you have to pay every month, it’s quite possible to get confused and lose sight of one of them. Depending on the obligation, even one day of delay may adversely affect the final result.
In order not to miss payments, set up automatic payments for regular bills, such as utilities, electricity, gas and telephone. After that, put a reminder in your phone to check whether all transactions were successful. Other payments that do not occur every month, put in the calendar and set a few reminders before the due date.
2. Do not use more than 70% of the available loan.
Another interesting factor that credit companies use to determine your solvency is your credit utilization rate. This is the ratio of the amount that you use to the total amount that is available to you for the loan. The simplest example is a credit card. For example, you have a plastic loan approved for 100,000 rubles, and the positive balance is currently 30,000 rubles. This situation is considered the maximum permissible. Do not spend the remaining money if you want to have a positive score in your credit history.
Use a maximum of 70% of approved credit to maintain a high score. If you spend the entire available amount and do not return 30% of it in the same month, your account will begin to creep down.
3. Keep track of your credit report.
There are several options to get your credit report completely free, so there are no excuses for not knowing your rating and not controlling it. Regularly check your credit history for errors, such as unauthorized accounts or credit cards that do not belong to you. Errors in the report may be of a completely different nature, upon detection of which, you must immediately contact the KJV and submit documents proving your case. If the error is not corrected in time, it will haunt you for a long time and spoil your financial well-being.
4. Ask for a credit limit increase.
The use of credit plays a big role in building a credit history. You can quickly increase your credit score by increasing the amount available for a loan. If you have a good relationship with your credit card, it means that you did not miss the required payments and you can contact the bank to increase the limit. After approval, your credit score will grow.
But beware! When you increase your credit limit, you may find it very tempting to spend a little more money than before. Don’t fall for this trap! Do not forget about the second rule – use no more than 70% of the loan amount available to you.
5. It is necessary to take a loan different from the existing one.
For example, take a credit card. They are in the form of renewable debt, and personal loans provide debt in installments. Thus, if you have a credit card, it may be helpful to borrow a small amount to increase your credit balance. Depending on your needs at the moment, the amount can be quite large. The point is that if you are planning a large purchase and you have a credit card limit that is sufficient for this, try taking a consumer loan. When you pay it, your score will increase markedly.
In addition, today there are a lot of programs that allow you to combine several loans into one and thereby reduce the interest rate and monthly payment. Despite the fact that lenders are interested in receiving as much money as possible from their clients, they also understand that due to competition, loyalty is needed.
Building your credit score will take you a certain amount of time, but if you consistently apply these five tips, you can improve your credit history and take control of your home money.