5 ways to improve your credit score quickly

Your credit score is one of the most important three-digit numbers in your life that will help you get all types of loans, credit cards, and other financial support. The higher your credit score, the more amount of money you can get a loan.

If your credit score has reduced in the last couple of years, you are not alone. Improving your credit score takes a lot of time, but the sooner you address the problem, the faster your credit score will go up. There are many ways you use to increase your credit score. In this article, we have made a list of ways you improve your credit score quickly:

  1. Pay Bills on Time

A credit score is used by lenders to check whether you have a good history of paying your loans back on time or not. Your past performance is considered a good predictor of your future performance. By paying your bills on time, you can up your credit score within months. Paying late or less than the agreed amount can negatively affect your credit score.

Your bills not only include your credit cards but also your personal loans, consumer durable loans, rents, phone bills, and more.

  1. Maintain credit utilization ratio

The credit utilization ratio is one of the main factors that affects your credit score. This score is calculated by adding all your credit balances and dividing them by your total credit limit.

Lenders like to see a ratio of 30% or less. People who have high credit scores have low credit utilization ratios. This tells a lender that you haven’t maxed out your credit cards and know how to maintain your credit. You can maintain your credit utilization ratio by paying off all your debts and keeping your credit card balances low.

  1. Don’t apply for new credit cards unnecessarily

Opening new credit accounts can negatively impact your credit score. Whenever you apply for a new credit card, the lender will check credit score of the applicant. If you apply for a new card too soon, you lose points on your score. Plus, when you have too much credit to spend, you are at the risk of overspending and accumulating debt.

  1. Don’t Close Unused Credit Cards

Keeping your unused credit cards open helps in maintaining your credit utilization ratio. If you close your credit card, the amount of credit you have will decrease but the amount of debt remains the same. This can lower your credit score quickly.

  1. Make either full or min payment

There are two main reasons why you should avoid paying only the minimum payment on your loans and credit cards. The first reason is that it is a terrible way to pay off any debt. Paying just the minimum amount means that you will be paying money for many years. The second reason is the interest fee, the longer you stretch your debt, the more interest you will pay in the long run.

However, if the minimum amount is all you can pay, make sure you are making the payment every month. Otherwise, you will have late or missed payments reflected on your credit report for seven years.

Maintaining your credit score is very important because it allows you to get financial support from banks whenever you need it. If you are not sure about your credit score, you can use the internet and get free Cibil Score Check services.

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