If you are one of the thousands of people whose applications have been rejected by credit card companies or loan providers, then checking your credit score is necessary. Although many people are aware of this term yet most of them are confused about its implications. Thus, the majority of commoners are not able to adjust their credit score in time to enjoy the benefits of loans and credit cards.
Again, one must remember that improving credit score is not an overnight process as it is more like a marathon than a sprint. Many people lose tens and thousands of dollars just because of a poor credit score. The lack of financial literacy also affects our peace of mind by giving us undue stress.
We are here to the rescue with proven methods to strategically improve our credit score.
Having a check over credit reports
There are three reports for each person from Experian, Equifax, and TransUnion. These reports are not only contradictory many times but also wrong. As per the latest studies at last one of every five consumers is suffering from error in their report. To compute accurate credit score, your credit reports should be verified continuously. Any mistake in your report will likely worsen your score.
As per the Fair Credit Reporting Act, we are entitled to a free copy of our credit score every year. Thus, you have the chance to rectify any inconsistency with the credit bureau. It is possible that a mistake is not committed by all three bureaus, but separate errors are likely to occur. You can hire a reputable credit repair company or fight the case yourself.
Develop a plan
After amending all the mistakes and re-checking the reports, you must find out ways to improve your results. You can either hire a financial management firm or log into many online platforms to create a well-balanced program for improving your credit score. Some professional help will also provide you with tips specific to your case and goals.
In the initial stage, you should aim to limit your credit card balances at the lower end with the management of other credits you might have. On the other hand, you must pay down all your debts instead of moving it around the economy. Moreover, blocking unused credit cards won’t be of any help.
Last but not the least; you should avoid any attempts to open another credit account to get eligible for a new loan or a new credit card as you already want to increase the credit you still have.
Avoid late payments
The sudden closure of an account will not dismiss your late payments. The best you can do is to take charge of your bills and settle them within the due time. It is advised for you to set up due date alerts for all the loans and credit cards. The new and organized you will be more efficient in managing financial liabilities and improve reputation in front of the lenders. Again, make sure that the due dates are in complete harmony with your paycheck schedule.
You can always ask the credit card issuer to change their due dates as per your paycheck arrivals. Thus, you will be able to pay these obligations as soon as you get money. Not only will it save you from spending over unwanted things but will also eliminate the entire mental trauma.
One must know that late payments can remain part of the credit report for up to seven years from the date of its record known as the original delinquency date. However, the credit bureaus do provide a thirty-day grace period for the submission of the payments. But it does not mean that you will be exempt from penalties and charges.
The above-stated methods are the basics of keeping your credit score under control. The fast-moving ways of economic activities are bound to confuse a person. Thus, we advise you to take up help from professional firms and individual consultants.
Remember that credit scores are an important aspect of your financial standing especially if you are into business. Take time to check your credit report and do not refrain from taking a step to improve your position.