A good credit score opens up opportunities for you. If you apply for a mortgage, you are liable to lower interest paybacks. Not only that but also for personal loans, no credit check loans and payday loans – credit institutions classify you as being financially responsible. However, if your current rating is poor, it can get better. In this post, we discuss the top 7 easy ways to improve your credit score.

Prioritize early credit payment

Strive to offset your bills on time. Delay can have a negative effect that lasts several years. Failure to cover your monthly bills is the leading cause of a bad rating. As much as possible, pay the minimum due before a month ends. It shows that you take your finances seriously. Moreover, it keeps your account safe from a collections agency. Meanwhile, if you cannot afford the minimum amount, negotiate with your credit institution.

Maintain your account even if you can do without it

A mistake people make is to close credit accounts they no longer use. Do you know your financial history counts towards your account rating? It does. Moreover, the longer the duration, the better position it puts you. Rather than cutting those cards, please keep them in a safe place. Also, it keeps your credit utilization ratio modest, at least under 30%.

Spend less than your credit card limit

When you sign up for a transaction card, it reflects and affects your total financial rating. Beyond owning the card, how you use it matters more. Furthermore, experts advise that you cap your monthly usage at 30%. For instance, if you have a spending limit of £5,000 but charge just £1,000 to it, you have a 20% utilization ratio. Another advantage of this approach is the ease of paying back.

Close joint accounts following a divorce

A divorce can be heartbreaking. However, nothing can be worse than bearing the financial burden of a broken home. When people marry newly, they create joint accounts and become co-signatories to several credit instruments. Consequently, your spouse’s credit rating will affect yours. As long as you stay together, it might be a necessary evil. After you part ways with your spouse, it makes no sense shouldering such responsibilities.

Consider credit only when it is unavoidable.

These days, getting new credit cards is relatively simple. For instance, you walk into a retail store, and they have one waiting for you – especially for a purchase worth bigger bucks. Before you append your signature, check the interest rate and repayment schedule. Meanwhile, if your current card can service the payment, use it. Also, ensure you pay for only what you need.

Keep bankruptcy at bay.

Several articles on the internet analyze the benefits and drawbacks of going through bankruptcy. One thing is clear – it plunders your credit rating quicker and longer than other factors. Worse still, it will not solve your problem. Instead, it sets you up for future challenges. For example, no mortgage or vehicle financier will give building or car loans to a victim of bankruptcy. So, downsize or find other options.

Keep your creditors close.

Many people believe creditors are personal enemies against their hard-earned cash. The truth is – they are not. On the other hand, they are businesses working tirelessly to make profits and become sustainable. Furthermore, they dedicate their time to serve you better. Therefore, change your perspective on them. If you foresee a default or financial challenge, speak to them for another alternative. Being responsible will position you as a credible customer.

Conclusion

Upgrading your financial rating is not rocket science. By following these top seven easy ways to improve your credit score, you can salvage the situation. Remember, you always have options no matter how gloomy it looks.