What is a credit score? It is a three digit number that indicates to creditors your ability to repay any borrowing facility that you apply for. If your credit score is poor, there is also a possibility that your application will be rejected altogether. Naturally, you don't want that to happen and this can only be avoided if you have a good credit rating. So what can you do to achieve this?
A majority of the population have a good rating. Pay your credit card bills and other loans on time and your rating will be positively affected. Avoid incurring penalties for late payment or exceeding limits as these will have an adverse effect.
So how do those with low credit rating fall into the trap? Often they are unable to pay finance back and the amount owing continues to accumulate. This increases the amount of interest accruing.
Some people are late with their payments. Those who ignore calls or letters from the bank will have the payment marked as "unpaid." This information is posted on your credit report so that lenders, whom you might approach in the future, will already be wary of giving you credit.
You have to be seen to be paying your debts to maintain a good credit score. Good housekeeping, cutting expenses and earning additional money may help your circumstances but will not be enough if a reduction is not seen. It is always best to stay in dialogue with your creditors to prevent negative comments on your record.
You could always turn to friends or relatives to help if you have to. However, whilst they are unlikely to charge you interest is it really worth the risk of you letting them down if you run into further problems.
Close control of your credit card can help improve your credit score. Some finance experts believe that you should only utilise 25% of your limit to boost your rating. Paying off the balance regularly, and not just the minimum, is also seen as a positive.
As your rating improves your bank may want to increase your credit. This is a good idea providing you do not deviate from the goal to control take control of your finances.
Also be mindful that errors on the part of a creditor may prevent you from getting a good credit rating. So amke sure you review your credit report and make sure all the details are accurate. If you spot any mistakes, report it and provide proof with the proper documents to the creditor. Your credit score should improve afterwards should the investigation work out in your favour.
Monitor your budget carefully to avoid overspending. Even if you have done well this year you need to keep up the good work and reduce those commitments. If you do not then you only have yourself to blame.
A majority of the population have a good rating. Pay your credit card bills and other loans on time and your rating will be positively affected. Avoid incurring penalties for late payment or exceeding limits as these will have an adverse effect.
So how do those with low credit rating fall into the trap? Often they are unable to pay finance back and the amount owing continues to accumulate. This increases the amount of interest accruing.
Some people are late with their payments. Those who ignore calls or letters from the bank will have the payment marked as "unpaid." This information is posted on your credit report so that lenders, whom you might approach in the future, will already be wary of giving you credit.
You have to be seen to be paying your debts to maintain a good credit score. Good housekeeping, cutting expenses and earning additional money may help your circumstances but will not be enough if a reduction is not seen. It is always best to stay in dialogue with your creditors to prevent negative comments on your record.
You could always turn to friends or relatives to help if you have to. However, whilst they are unlikely to charge you interest is it really worth the risk of you letting them down if you run into further problems.
Close control of your credit card can help improve your credit score. Some finance experts believe that you should only utilise 25% of your limit to boost your rating. Paying off the balance regularly, and not just the minimum, is also seen as a positive.
As your rating improves your bank may want to increase your credit. This is a good idea providing you do not deviate from the goal to control take control of your finances.
Also be mindful that errors on the part of a creditor may prevent you from getting a good credit rating. So amke sure you review your credit report and make sure all the details are accurate. If you spot any mistakes, report it and provide proof with the proper documents to the creditor. Your credit score should improve afterwards should the investigation work out in your favour.
Monitor your budget carefully to avoid overspending. Even if you have done well this year you need to keep up the good work and reduce those commitments. If you do not then you only have yourself to blame.
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Want to find out more about credit, then visit Phil Craven's site on how to choose the best personal loan for your needs.
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