The value of an individual can be easily reflect through his or her credit score. Although this cannot be deemed as a fitting correlation, many institutions see to think this is true. From banks to your landlord, everyone is checking credit scores to determine potential risks.
A low credit score is one major hindrance to having a brighter future. The only thing that could be standing between you and your dream car, a credit card or your dream house is a low credit score. Therefore if you want simple ways to not only intelligently build your credit score, but for a long term purpose, here is what you should know.
Ensure that you keep a reasonable balance as well as a credit limit. This is for individuals who have an active line of credit and are looking to responsibly grow their credit score, you have to access your credit and ensure only small amounts of it is used.
Ideally, the ratio of a used credit compared to the total revolving credit must not be more than 1 from every 3 dollars. When you have a credit but do not use, lenders are immediately alerted that you are a responsible individual. Although it is bad to have several credits and not use them, it is essential to keep your overall credit balance low.
All the incorrect charges have to be disputed. Many people never look at their credit line. This can be a potential costly disaster in the making. Failure to look into your credit report can lead to you missing out potential theft and fraudulent activities which may be damaging to your credit score. Every individual is allowed a free report in every six months. Ensure that you take a look into your credit often. When you come across something in your credit which does not add up, make sure that you dispute it right away.
Make sure all your credit applications are timely. Whether you are looking for a new line of credit, a car or a new home, it is advisable not to bombard your report with numerous inquiries over a certain period of time.
Make sure your payments are done on time. A lot of people who have low credits always make the mistake of making their payments late. Nowadays, a lot of companies and businesses tend to report late payment behavior to credit bureaus. Although it is understand to make late payments once in a while, it is good to always pay on time. Keep up with your finances and even set alarms that will remind you to pay up or use auto bill payment services.
Start with small loans. Your credit score might be so low that it does not allow you to borrow a large amount of money. Therefore you should start with small loans.