possible ways to improve your credit rating
Post on 21-Feb-2016
220 Views
Preview:
DESCRIPTION
TRANSCRIPT
Personal Finance Possible ways to improve your credit
rating
Credit Rating: What does
it mean?
• Your credit rating
is a way for banks
to evaluate the
risk of lending you
money
• It evaluates your
creditworthiness
• It is based on your
ability to manage
your debts and
finances Photo by 401K via Flickr
Why should I care about
my credit rating?
• If you are applying for a 0 balance transfer credit card, a mortgage or even just a loan to buy a new car or something as small as a laptop, your credit rating is consulted
• Your credit rating could be the difference between a yes and no to all the above things
Photo by 401K via Flickr
Possible ways to improve
your credit rating #1 Get yourself a credit card
• People often steer away from credit cards, knowing that
you have to pay interest on payments. However not
having a credit card can negatively effect your credit
rating
• Credit card companies and banks do check your credit
rating when you apply for a credit card but it is a very
basic evaluation
• Using a credit card properly will show lenders that you
are capable of borrowing and paying back a small
amount of money and will kept to secure bigger loans
Possible ways to improve
your credit rating #2 Pay your bills on time, every time
• Missing payments negatively effects your credit rating
• Watch out for gas and electricity & TV licence payments – these are more than often checked
• Try to pay as many
bills as possible by direct debit, this ensures you don’t miss the payment
Photo by 401K via Flickr
Possible ways to improve
your credit rating #3 Don’t max out your credit card
• We all know how tempting it can be to max out your credit card,
those new pair of shoes are calling
• This might show the lender that you are impulsive and that you
are pushing your limit
• It is suggested that you stay 30% below your limit unless there is
an emergency, no matter if you pay it back in full every month or
not
• This shows that you are able to balance your credit, and paying
it back in full every month again shows your ability to manage
debt and thus improving your credit rating
Possible ways to improve
your credit rating #4 Regular check ups
• Keeping tabs on your credit rating means you can iron out inaccuracies with your finance history
• You can get a credit report from credit reference agencies such as Experian. They also have a handy credit rating quiz to establish a quick credit rating prediction before you apply for a report.
Photo by Images_of_Money via Flickr
Possible ways to improve
your credit rating #5 No means no
• It is recommended that if you have been turned down for a credit card
or any kind of loan you should stop applying
• Continuously applying and being turned down can have a negative
impact on your credit rating
top related