Do You Make These Credit Mistakes?
A good credit report is increasingly important to all of us. It’s not just having a credit score that will allow you to get finance if you need it but more and more employers are asking for one when recruiting and also promoting.
Many people don’t understand the importance of their credit history and so they don’t take enough care to protect it. But the good news is that there are some very simple things that anyone can do to help keep it looking impressive.
1. It really should go without saying but always ensure that your payments are made on time. That doesn’t mean a week late or “only a couple of days” late it means on or even before the due date. Sure the lender might not say anything when they take the payment but you can be certain that it will be picked up by the computer and will show you as being a late payer.
2. Only ever agree to be a co-signer for someone who you know is not only trustworthy. The way they pay can affect your reputation as well as their own. A good tip is to stress that if they are not going to pay on time they must let you know in advance. That will allow you to keep your rating intact even if you have to make the payment yourself.
3. If you find yourself in a financial fix speak to your creditors. I know that when you’re in that situation it feels embarrassing but you can help limit the impact by talking to your lenders as soon as you know you’re having difficulties. It shows them that you’re a responsible borrower and that will be recorded on your credit rating. They know that problems happen, that isn’t the issue. It’s how you respond when things go wrong that really counts.
4. Don’t pay just the minimum payment due on your credit card each month. It’s not only a way that finance companies use to keep you in hock to them for years at exorbitant rates it’s also a big red flag that indicates that you’re an above average credit risk.
5. If you find that you’ve got more than 2 credit cards that have high or increasing balances each month then take steps to pay them off. If you can’t manage to do that yourself in a reasonable period of time then consider taking out a bank loan. The interest rate will be far, far lower than your credit card interest rates and what would have been going on interest each month will serve to reduce the balance. It again shows anyone looking at your credit rating that you’re a savvy borrower.
6. Following on from number 5 above, if you take out a loan to pay off your credit cards make sure you cut them up. If you don’t there’s a better than 80% chance that you will build the balance back up with about 18 months. Remove the temptation of thinking it will be okay and you’re on your way to rebuilding your credit status.
Follow these guidelines and you’ll be surprised how quickly you can get your credit score back up to where you want it.
A good credit report is increasingly important to all of us. It’s not just having a credit score that will allow you to get finance if you need it but more and more employers are asking for one when recruiting and also promoting.
Many people don’t understand the importance of their credit history and so they don’t take enough care to protect it. But the good news is that there are some very simple things that anyone can do to help keep it looking impressive.
1. It really should go without saying but always ensure that your payments are made on time. That doesn’t mean a week late or “only a couple of days” late it means on or even before the due date. Sure the lender might not say anything when they take the payment but you can be certain that it will be picked up by the computer and will show you as being a late payer.
2. Only ever agree to be a co-signer for someone who you know is not only trustworthy. The way they pay can affect your reputation as well as their own. A good tip is to stress that if they are not going to pay on time they must let you know in advance. That will allow you to keep your rating intact even if you have to make the payment yourself.
3. If you find yourself in a financial fix speak to your creditors. I know that when you’re in that situation it feels embarrassing but you can help limit the impact by talking to your lenders as soon as you know you’re having difficulties. It shows them that you’re a responsible borrower and that will be recorded on your credit rating. They know that problems happen, that isn’t the issue. It’s how you respond when things go wrong that really counts.
4. Don’t pay just the minimum payment due on your credit card each month. It’s not only a way that finance companies use to keep you in hock to them for years at exorbitant rates it’s also a big red flag that indicates that you’re an above average credit risk.
5. If you find that you’ve got more than 2 credit cards that have high or increasing balances each month then take steps to pay them off. If you can’t manage to do that yourself in a reasonable period of time then consider taking out a bank loan. The interest rate will be far, far lower than your credit card interest rates and what would have been going on interest each month will serve to reduce the balance. It again shows anyone looking at your credit rating that you’re a savvy borrower.
6. Following on from number 5 above, if you take out a loan to pay off your credit cards make sure you cut them up. If you don’t there’s a better than 80% chance that you will build the balance back up with about 18 months. Remove the temptation of thinking it will be okay and you’re on your way to rebuilding your credit status.
Follow these guidelines and you’ll be surprised how quickly you can get your credit score back up to where you want it.
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