Use Self-Improvement Month to Get Your Credit Score into Shape
Self-improvement month is a great time to reflect on your personal goals and find new ways to achieve them. From mental health to spiritual health and physical health, there is always something you can be focused on!
For many of us, improving our financial health is the most important goal as it provides stability and more opportunities in the future. If financial security is important to you, then why not use Self-Improvement month to improve your credit score? We are here to help you work out how to do it and will share with you exactly what a good credit score is, the components that make one, and how to achieve it with some handy tips and tricks!
What Does a Good Credit Score Look Like?
Many people are keen to improve their credit score but do not understand what it is or how it is calculated. Rather than guessing, we have shared the information you need to start your self-improvement journey right away!
First, it is important to understand what a credit score is. A credit score is a number that depicts where you are on the credit spectrum and shows potential lenders whether you are a safe risk to lend to or if you are likely to default on payments.
The credit score spectrum ranges from around 300 up to 850, with the higher score translating into a better credit profile. There is no specific split between each stage of the credit spectrum, but any score below 630 is considered to be an issue, and any score over 720 is deemed to be good.
If you have a good or excellent credit score, then you are likely to pay your bills on time, only have a low credit use on your accounts, and hold accounts that have been opened for years without any blemishes. People who get lower scores are often found to be late in paying bills, in default on accounts, or have maxed out their credit limits.
To really understand how your credit score is made up, look at the following factors to help:
- Around 35% of your score is made up of information about your payment history
- About 30% of your score is based upon how much you owe
- 15% of your credit score links to the length of time you have held your accounts
- 10% of your score is determined by the mix of credit accounts you have
- 10% of your score is focused on the amount of new credit you have in your name
Our Top Tricks and Tips to Help You Improve Your Credit Score
1. Get to know your credit report
one of the most effective ways of improving your credit card score is to get to know what is on it and work to improve the accounts that are listed. Many people find that they have accounts that they had forgotten about or errors on their report that need to be changed, providing a very quick and easy way to improve your overall score.
2. Remind yourself to pay on time
one of the biggest problems on credit reports is late payments and defaults. Avoid this becoming an issue for you by setting simple reminders so that you pay all your bills on time. By doing this, you will not only keep your accounts in good standing, but you will appeal more to other lenders as you can be relied upon to pay on time.
3. Pay as many times as possible each month
by making extra payments each month, you are not only showing future creditors that you are committed to clearing debt, but you will get rid of your debt sooner. Extra payments go off the balance of the account, reducing the overall interest you pay and the number of repayments you need to make.
4. Be open with your creditors
the vast majority of creditors are willing to work with you to agree to payment plans that you can afford. By talking to them about your situation, you are more likely to be able to pay your bills without having a negative impact on your credit report meaning that you will not be penalized when you can’t afford to keep up repayments.
4. Don’t assume old debts need to be a priority
you may believe that paying off all your debts is important, but you may find that your older debts no longer show on your credit report, and so you could be paying them off with little impact on your overall credit score. Take the time to work out which accounts need to be prioritized and pay them off in the right order until every balance is clear.
5. Reduce your maxed-out accounts first
credit utility is a large part of your overall credit score, and so it is wise to reduce the balance on any account you have that is maxed out. By doing this, you will show that you have a better handle on your finances and will be more likely to be approved for credit.
6. Avoid spending to your credit limits
if you have accounts with available credit, don’t see them as an opportunity to spend. By reaching your credit limits, you will not only show credit companies that you are not great at managing money, but you will also leave yourself without an emergency fund when something unexpected happens.
7. Don’t shut old accounts
when you have finished clearing the balance of older accounts, don’t rush to close them down. By having older accounts that are clear and accessible, you will show potential creditors that you have held a good financial relationship for some time without flitting to new providers every time you need more credit. This will make you a more attractive prospect than someone who closes accounts and only has recent ones left on their report.
8. Drop the utilization of credit across all your accounts
Sticking to 25% – 40% credit utilization on each of your credit accounts not only shows that you know how to handle money but gives lenders confidence that you are a safe bet when it comes to extending more credit. By keeping your credit utilization low, you are more likely to improve your credit score and get access to better credit offers too.
9. Consider quick loans in emergencies
if you are at a point where your credit rating is low, then you may need to find inventive ways of improving it. One way to do this is via a quick loan for shopping that will provide you with a small sum to spend and will report your repayment to credit agencies, allowing you to get positive marks even when other companies refuse you.
Invest in Rent-to-Own Metal Buildings with No Credit Score Needed
If you want to save money and improve your credit score when building a new home or building for your land, then choosing a steel building from American Metal Buildings is a great choice! Metal buildings are much cheaper than traditional methods, and with our Rent-to-Own scheme, you can map out your payments in the most affordable way.
American Metal Buildings is here to help you whenever you are ready – give us a call today at 877-277-3060 and let us help you build your credit and a new metal building!