Those with a poor credit score who are looking to improve it can often find themselves in somewhat of a catch-22 situation. Perhaps you have paid off any previous debts, but have been left with a poor credit score that’s standing in your way of borrowing money and repaying it on time – often one of the only things that you can do to get your credit rating going in an upward direction quickly. The good news is that even with a lower than average credit score, there are several things that you can do in order to start improving your credit score.
#1. Borrowing Small Amounts:
Although a low credit score can stand in your way of borrowing big amounts of credit, the good news is that you may still be eligible for smaller loans from Loan Pig USA, such as payday loans for bad credit. The advantage of these types of loan is that unlike a larger loan, they usually have a short repayment period of just a few weeks or months and, therefore, tend to be easier to manage, especially if you’re not sure that your financial situation will be the same after a few years.
However, short-term loans do tend to have higher interest rates, so it’s crucial that you are sure you can afford repayments before you apply.
#2. Avoid New Credit Card Purchases:
Even if you’ve repaid the entire balance of your credit card, simply having the funds available to you can help your credit rating improve. Don’t close your credit card down completely – doing this can actually harm your credit rating as potential lenders can no longer see that you have the funds available. A credit card with at least 50% of the balance available to spend but not being used can have a positive impact on your credit score, as it sends lenders the message that you’re not relying on credit. So keep your card open, but avoid any new purchases.
#3. Get a Copy of Your Credit Reports:
The best way to improve your credit score will depend on your personal situation, so it’s a wise idea to get a copy of your credit reports so you can see exactly what is causing problems, making it easier for you to determine the best next steps to take. In addition, a copy of your credit reports will enable you to go over them for any discrepancies and mistakes that could be leading to an unnecessarily low score.
#4. Avoid Making New Applications:
Unless you’re making an application for a short-term loan that you are sure you’re going to be accepted for, it’s wise to avoid making any new applications for credit. If you are rejected, this will further go against you on your credit score and could lead to the numbers dropping further. Eligibility checkers are the best way to make sure that you are going to be accepted for credit before you apply, without affecting your credit score.
Did you find these tips for improving your credit score helpful? We’d love to hear from you in the comments.