Five ways to improve your credit score

If you’re struggling to improve your credit score, you’re not alone. This is not an irreversible problem.

These are five ways to help you.

1. Examine for Errors

20% of credit reports have errors, 20% of those who dispute it see their scores increase. Make sure you check your credit report.

2. Get Rid of Your Debt

It will be hard to improve your credit score if you have lots of debt. You might also have high credit utilization, which is when you hold high balances on your card and other accounts in relation to your limits – i.e. you’re maxing everything out.

You must take control of your debt and start paying it off. The good news is that if you’re in a particularly tough spot it is possible to negotiate with creditors to reduce interest and setup a more manageable repayment schedule.

3. Keep It Simple and Borrow what’s Available

If you have paid down your debts but have a poor score because of past mistakes, it’s time to start borrowing again – even if your options are limited.

It is important to show lenders that you are capable of meeting your obligations. You can use credit cards to pay for the basic items that you know you can afford, such as groceries. Then pay the balance in full each month (or the minimum plus the amount you spent on groceries).

If you’re starting again from scratch, open simple accounts like a cell phone contract or take out a payday loan from a reputable website like ElcLoans. The loan will be paid back in 30 days. Therefore, only borrow what you can afford.

Note: The idea is not to get into debt again; it’s to use available credit you can easily repay to rebuild your score.

Check your credit score free of charge Clearscore.

4. Keep old accounts open

Once you’ve paid off a troublesome card it’s understandable to want to close it, but now it’s in good standing it’s actually starts helping you. This is due to your credit history (longer the better) as well as keeping your credit utilization low.

5. You can get different types of credit

10% of your credit score is based on your ‘mix’ of credit. In other words don’t only ever use credit cards.

Use a credit card for groceries and a car loan to finance it, even if you would rather pay with cash or a debit card. You can also use store credit when it is offered.

You might consider a personal loan if you have a lot on your cards. It will consolidate the debt while also expanding your credit range.

You can improve your credit score by implementing the methods above.

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