Your credit score is an important element of your financial passport and the better it is, the more trustworthy lenders may see you as being. There is a common misconception that you only need a good credit score if you need to take out a loan but there are other reasons that you might want to take a look at your score and give it a boost if needed.
For many of us credit plays a significant role in our lives every day and especially at life’s most important moments. We recently covered the very thing in a previous newsletter and you can take a look at that here.
Major purchases such as a house or a car, and even employment opportunities, can be dependent on a good credit history and that’s why a stronger credit score can give you a better chance at getting a good deal from your creditors.
We are often asked how long it takes to rebuild your credit score. Actually, you don’t rebuild the credit score at all, you rebuild your credit history which is then reflected by your credit score.
Some simple steps that you can take to give your credit file the boost it needs are:
- Set a budget and make sure you stick to it. Credit should not be a way of living beyond your means.
- Pay your bills on time where possible as late payments, negatively affect your ability to get credit as they indicate a likelihood that you will make late payments again or will be unable to pay your debts in the future.
- Exercise caution when closing your accounts. Closing an account isn’t always a good thing. It can result in an increase to your balance-to-limit ratio, meaning that you appear to be an increased credit risk.
- Demonstrate as much stability as possible, because some creditors will consider your length of employment, length of residence, whether you own or rent and if you have any savings in making credit decisions.
For more information about how to improve your credit score click here.