How financially responsible you are, is determined by the credit score that gets recorded in your credit report. In fact, it is your financial report. Information related to your financial transactions is documented in the credit report. This in turn will decide your fate when you would want to avail a loan, regardless of whether it is mortgage, or secured and unsecured loan of any type.
In this article, let us find out how you can improve your credit score by making certain changes in the way you handle your finances.
How will your financial behavior impact credit score?
Given below are few ways in which you can enhance your credit score so that you can enjoy a number of financial benefits. It may be mentioned here that the range is between 300 and 850, where above 750 is regarded as excellent score and if the figure is below 600, it is usually regarded as bad. Take a look at these measures-
- Keep tab on credit card balances
Your revolving credit versus the actual credit you are using is one of the factors that will decide the status of your score. Make sure you restrict the percentage to as low as possible to facilitate better score in your credit report.
Ideally speaking, 30% and lower is desirable. In the event you are using multiple credit cards, it makes sense in collating them together. You could as well apply for a personal loan and pay off the consolidated debt.
- Keep old records intact in your credit report
Oftentimes, it is seen that individuals that have bad credit in their reports try to get the bad records removed. However, it is not necessary to put in extra effort to do so because after a span of 7 years, the bad record gets deleted by default.
Instead, you try to be regular with the payments that you have taken responsibility of and pay off the debt within the stipulated time period. Experts are of the opinion that the longer there is record of good repayment schedule, the better it is for your credit score. If you want to know more about the bad credit score, you can browse through https://aaacreditguide.com/bad-credit-score/.
- Curb the number of inquiries
Whenever you apply for credit, there are certain inquiries that are carried out pertaining to your credit details. The creditor will usually make the inquiry with anyone of the credit reporting agencies, namely, Equifax, TransUnion, and Experian. The more the number of inquiries, the more detrimental it is for your credit score. So, try to curb the number of inquiries as much as possible.
- Avert Bankruptcy
Try to avert filing for bankruptcy as much as you can. This is one of the worst financial mishaps that could get recorded in your credit report.
Aside from the above measures, it is on a daily basis that you can try and improve your financial habits that can help you to go a long way as far as financial stability is concerned and thereby improve your credit score over a period of time.