Here's How You Can Improve Your Credit Score
JUNE 3RD, 2020
It is common knowledge that a bad credit score can be a huge problem. This is especially so if your score is below 600. Having such a low score might result in greater difficulties when you are trying to get an auto title loan because some lenders might need to report this to the credit bureau. In fact, a bad credit score might affect your insurance coverage and even future job prospects. Essentially, your credit score will follow you everywhere and can be the deciding factor in whether you have a successful business or loan in the long run. However, if you find yourself in this situation, fret not because there are numerous ways in which you can work to improve your credit score in a short amount of time.
Make Sure You Pay the Balance for Your Credit Cards
The debt that you owe lenders actually makes up about 30% of your entire credit score. What this means is that you can improve your credit score by paying down the debt for your credit cards. Doing so will also help to reduce the amount of interest that you will have to pay. The best way to improve your credit score by paying off any credit card debt that you have is to do so within 30 days. Clearing your debt in such a short period of time will definitely help to increase your credit score. However, it is understandable that not everyone is able to pay off their credit debts in such a short time span. As such, you can opt for reducing your credit card debt to about 30% of your credit limit.
Stop the Late Payments
Late payments might be the main cause of a bad credit score. You might not be aware, but a late payment of 30 days can lower your score by up to 80 points depending on the situation. Therefore, bear in mind that the longer you take to make your payments, the bigger the penalty on your credit report. The best way to deal with this is to avoid any such situations in the first place. However, you can have peace of mind knowing that you can remove late payments from your credit history. All you have to do is make a call to your creditor and ask them politely if they can remove the late payment as a sign of good faith. If you have a good repayment record, chances are they will close an eye for this rare situation. Some lenders might only agree if you sign up for automatic payments.
The Importance of Being an Authorized User
If you want to play the system, becoming an authorized user is an excellent move. If you happen to have a good friend or relative who has a good credit score and track record, you can request to be added as an authorized user for one of their accounts. This would mean that you will receive the benefits from that account but are also responsible for any defaulting.