At this moment in time, millions of people from all around the world are unable to get access to a traditional loan due to their low credit scores. Often times, it seems like there is nothing people in such positions can do to improve their overall score, yet this is completely wrong. In fact, there are over 7 things that you can do in order to improve your credit score, thus increasing your chances of being able to secure a loan in the near future.
Investigating and disputing bank errors
Unfortunately, numerous people believe that banks cannot make mistakes. This is definitely a wrong approach, regardless of your credit scores. With this in mind, it is essential for people throughout the UK to actively keep an eye on their finances, and carry out small-scale investigations in case something appears odd. Mistakes do happen, and many banks offer their clients the possibility to dispute all sorts of errors. As long as you have proof worth taking into consideration, then chances are that you will save money, whilst also improving the overall state of your credit score.
Another common misconception that people from all around the world have when it comes down to dealing with debt is the fact that they cannot negotiate with their lenders. With this in mind, while you definitely cannot deny that you did not pay a credit card bill on time, due to other forms of financial hardships, you can always offer to pay the entire sum, and kindly ask the bank to mark the debt as paid upon the due date. While there is no guarantee that this technique is bound to work, it is definitely worth a try, as bank employees are often left to take some decisions at their own discretion. However, the chances of someone helping you out without having you reach our first, are quite shallow.
Under-use your credit cards
Getting a credit card is important to improving your credit score, yet using the card to pay for everything is not a good idea either, as it’ll show banks that you cannot manage your finances properly, thus lowering, or keeping your credit score at the same amount. Judging by this aspect, if you have a $2,500 limit on your credit card and you’re constantly maxing it out, or using 75% of it, then this definitely won’t put you in a green light. Therefore, you can attempt to use your debit card more, or even pay via cash, as this has the chances of improving your current credit score.
Avoid closing your cards down
Often, the process of cancelling a credit card can actually cause the credit that you have available to drop, which definitely doesn’t look good to any institution preparing to give you a loan. Therefore, a good tip would be to use your cards to pay for recurring payments, such as utility bills, and simply forgetting about it, while, of course, paying your debt back on time.
Find better ways of managing your funds
There is simply no way of improving your credit score then finding better budgeting options. Not only will this put you on the path to financial freedom, but it will also likely increase your credit score, and definitely keep it from dropping below a certain threshold. Together with this, doing so may also lower your need of requiring loans in the near future.
Consider the idea of using payday loans
Not many people are aware of this, but the payday loans market has grown exponentially in areas from all around the world, especially in the UK. These represent a special type of loans that do not take your credit score into consideration, yet which are limited to a certain amount that you will have to pay back within a considerably shorter period of time. With this in mind, if you are running behind on your recurring payments, or need some extra emergency cash, consider the idea of accessing this type of loan, rather than a traditional one, as the impact on your credit score will likely be minimal as long as you keep your promise and pay the loan back in time, usually within a few weeks.
Paying your bills on time
Your credit score is also often determined by how often you manage to pay your bills on time. Late payments can usually lead to lower credit scores, so keeping an eye on this aspect definitely won’t hurt.
Based on everything that has been outlined so far, raising your credit score isn’t an impossible endeavour, but rather quite simple, as long as you find better ways of managing your funds and respect some of the tips that have been outlined above.