There are some times in our lives when our bank balance can look a little worse for wear. During these periods, it can be tempting to take out a loan so that we make it to Pay Day. If you have a poor credit score, a bank or other money lending service may be reluctant to give you the cash.
Even our social media patterns can dictate whether we can borrow money or not. You’ll be amazed at what lenders see and use to shape their opinions see nowadays. To help you not trip yourself up in the big world of finance, we’ve created this useful guide to improving your credit score.
1. Don’t apply for anymore credit
This may seem like an obvious point, but many people apply for credit while trying to improve their score. That isn’t going to help matters. It’s also pointless to continue applying if you’re poor credit rating will put lenders off. So for now, live well within your means until you gain a better financial position. In the meantime, try and save some cash. We have some handy tips for making some extra cash over here.
2. Cancel unused credit cards
Why keep credit cards that you don’t use anymore? You may as well get rid of them because they’ll only be dragging your credit rating down. This will also help protect you from credit card fraud. You should also close any unused bank accounts. All of these idle cards and accounts could be charging you fees without you knowing. It’s best to get all this in check as soon as possible!
3. Don’t be inconsistent with applications
If you are inconsistent with your credit and loan applications, you’ll more than likely be rejected. So if you have more than one phone number, use the same one for every application. If institutions see different answers, they may think this is a bad sign and refuse you credit. Banks love consistency, as it shows you’re consistent with your finances!
4. Stay well away from payday loans
Payday loans may seem like a good idea at the time – what’s better than an instant injection of cash? But more often than not, they will drag your credit score right down to the depths. Some lenders may say that repaying one of these loans on time is a good sign, but they are in a very tiny minority. Usually, institutes will openly reject anyone with one of these loans. So beware!
5. Use credit cards to build up your credit score
Whereas loans can destroy your rating, weirdly enough, credit cards can help improve it. Even if you have a good track record and have never lent money, you may not come out with a good credit score. This is because the bank cannot tell how you would handle debt. So the best thing to do is take out a credit card and spend as little as possible on it each month. It’s very important that you repay the little amount on time, though!