Over recent years, more and more people have become more aware of the importance of their credit score and history. In the past, many were unaware of this, and therefore were not too concerned if their credit score took a nosedive – in fact, many had no idea what their score even was. However, since the global financial crisis in 2008, more people have realized that their credit score and rating can have a huge impact on their financial future.
A poor credit history and score can take its toll on your life in many ways. It can make getting any sort of finance difficult if not impossible – even if you do get credit, it will be at a very high cost. This means getting things such as a car loan or mortgage can become difficult as well as credit cards and other types of loans. It can affect your ability to rent a property as well, and in some cases could have an impact on your ability to get certain jobs.
What Can You Do?
So, what can you do in order to improve your credit score and secure your finance future? Well, there are lots of steps you can take, but you should try to do everything by the book rather than going through companies that claim they can improve your credit score overnight. This process does not happen overnight, and it can be a hard and gradual process.
One of the things you can do is to take out credit if you can get it, and then be responsible with repayments so your credit starts to go back up. You can build credit by loan and credit card applications that are successful and by using and repaying the loans and credit cards responsibly. If your credit is already very poor, you may be able to get products such as subprime credit card. However, the interest rates on these are crippling, so always ensure you clear the balance within the interest-free period each month.
Another thing you need to do in order to build your credit is to ensure you make all bills and other payments on time and for the specified amounts. Whenever you miss a payment or make late payments, a black mark goes onto your credit file, and your credit score will drop. Making sure you make payments in a timely manner over a sustained period will help to repair this. The easiest thing to do is to set up direct payments from your bank so that all your bill payments go out on the date required and for the right amount.
It is also important keep an eye on your credit report if you are trying to build up your credit. This will enable you to monitor how you are doing and where you need to improve. It also helps you keep you motivated if you see the progress so far.
These tips can all help when it comes to building your credit.