Do you know there’s even a dating site, named Creditscoredating.com that promises people to match with the love of their life based on financial capability? Isn’t it bizarre and so cool at the same time? Well, whatever be the intent, Square Yards has got you covered on how to achieve a good credit score.
Have you ever wondered why people are always obsessing over credit score ratings? Well, a good credit score can help them get their dream job and get loans at a lower interest rate.
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It is easier said than done- Improve your credit score by maintaining low balances or by opening accounts that report to the credit bureaus or by paying your bills on time. However, it gets intimidating to know where to start from. On the flip side, it does not matter whether you are rebuilding creditworthiness after your scores have taken a hit or you are on a mission to build your credit score from scratch. It is highly imperative to know how to check credit score, how credit scores are calculated, what mistakes to avoid and ways to improve your credit score ratings.
Let’s hit the chord and start with basics like what is a good credit score, how to calculate and check credit score. A credit score is a three-digit numerical expression that ranges between 300 to 900 and this score denotes the credit card holder’s creditworthiness. Moreover, Credit bureaus calculate the free credit score by considering factors such as payment history, credit age, credit utilisation ratio and credit type.
KEY TAKEAWAYS: A good credit score is considered to be a benchmark and based on this borrower’s creditworthiness is gauged.
If you possess a good credit score, then you get to enjoy a fleet of benefits such as access to the best rates on car and homeowners’ insurance and excellent perks and awards. If your credit score is already above 750, you are in a good state. To know more about how to take your score from good to excellent, keep scrolling!
| Credit Score | Rating |
| 300-549 | Poor |
| 550-649 | Fair |
| 650-749 | Good |
| 750-900 | Excellent |
Highly Actionable Strategies That Will Help You Achieve a Good Credit Score
Always Pay Your Bills On Time
Bear in mind, payment history heavily influences your credit score and creditworthiness in some way or the other. You cannot afford to take any risks since late or missed payments stay on your credit report for seven years. So keep making timely payments without any fail.
Monitor Your Credit Card for Checking Inaccuracies and Errors
You never know who is keeping prying eyes on your credit card details. Even a little negligence and vulnerability on your part can give a chance to cybercriminals to commit identity theft. Therefore, monitoring your credit card is a must and not only for safeguarding yourself from cyber crooks but also to keep a check on reporting errors and incorrect listings. Download your free credit score report that is provided by the reporting agency once a year. If you find something inaccurate, then report the discrepancy to the assigned credit bureau and immediately get them removed from your data so that it does not impact your credit score.
Integrate Your Debts At One Place
We comprehend it gets cumbersome to keep a tab of multiple payments. If you are juggling with the payment of multiple debts then it is best to consolidate all your debts under one umbrella since a single loan offers a lesser rate of interest. To make it a win-win situation for you, narrow it down as you will have a single debt to repay and it will also help you save tons of money on interest.
Cancel Unused/Extra Credit Cards
Always remember, hoarding credit cards won’t do you any good. In the long run, it will only harm your credit score. If you hold more than two credit cards, then it only leads to unnecessary hassle and mismanagement.
Get Your Credit Limit Increased
If your credit card company is willing to give you an offer to increase your credit limit, then accept this offer delightedly. Don’t reject this offer as it can help you improve your credit score. If you are a compulsive shopper, then you need to control yourself. You should only take advantage of an increased credit limit in case of emergencies.
Mistakes To Avoid
Even if you unknowingly and unintentionally end up making a mistake, it will affect your credit score. If you know beforehand what mistakes you can make in the future, it can help you resolve the low credit score issue.
#Mistake 1: Not Enough Credit History
People usually live in misconceptions that if they do not borrow any money from financial institutions, then their credit score ratings will remain good or excellent. If you are one of them, then you are living under the rock as this is not true, your credit score is highly dependent on credit history. Bottom line, if you do not have any credit history, it will affect your credit score as lenders will be left with nothing to monitor your creditworthiness.
#Mistake 2: Continuously Making Late or Missed Payments
If you are habitual of making late payments or if you end up missing payments, then expect the worst impact on your credit score. Don’t forget that 45% of credit score is usually dependent on payment history. The silver lining over here is when you start making timely payments, slowly and steadily you will be able to improve your credit score.
#Mistake 3: Applying For Multiple Credit Cards
If you are tempted to keep multiple credit cards in your wallet and also if it is only a show-off factor for you, then at no cost you should overlook the repercussions of it. If you are continuously filling forms and are applying for the issue of credit cards, it will lower your credit score. Additionally, in the future, it will also hurt your creditworthiness and also chances of getting quick loan approvals.
#Mistake 4: Not Checking Personal Credit Reports
It is pretty common to have errors in your report, but it is not fine to leave them unattended. Analyse your credit report periodically and if you spot any issue get it fixed instantaneously. Furthermore, if you are regularly checking credit score reports and keeping a track of payments, you can avoid the mistake.
Pro Tip:
Use your credit wisely and responsibly to achieve a good credit score.
Hopefully, by now you must be accustomed to the fact that you can only achieve a good credit score, if you are monitoring your credit health or when you are religiously following ways to improve your credit score and also when you are making no mistakes. No one can stop you from attaining a good credit score if you are keeping the above-mentioned factors on top of your mind. The silver lining is you always have a golden chance to improve your credit score ratings. So what are you waiting for? Go and start rebuilding your credit score ratings from scratch.
