Quick Tips to Improve Your Credit

improving credit scoresThere is a common phrase that pops up whenever you talk matters credit, and it goes, you can ignore your credit, but be sure that it will not ignore you. Since almost everybody has used credit services before they are subject to credit rating. And it is everyone’s wish that they have a good credit rating as this will come in handy at some particular time of their life.

Thus if you want to improve your credit score, you should first realize that it is something that you will not achieve overnight. Your credit score will to a large extent take into account your credit behavior from the past, your credit report and your present actions when it comes to dealing with credit. But if you are interested in improving your credit score, here are some quick tips on how you can be on your way to upward mobility in your credit score.

Ensure you pay your bills on time

All lenders before lending you any money will always access the likely hood of you paying back the money that you owe them. This is why you are encouraged to pay for your debts on time, every time, as this will go a long way in assuring them that you are a reliable debtor significantly helping boost your credit score.

This is why it is important that you should always endeavor to make payments on time, not only in your credit accounts but also your other bills like utilities, rent or even your cell phone bills. Avoid making late or missing your credit payments as this will considerably harm your credit scores.

Ensure you pay down your debts

When calculating your credit score, two things are taken into consideration: the amount of debt that you have, and the credit that is at your disposal. This is a deliberate move by lenders to ensure that you do not borrow more than you can be able to pay back.

Here experts recommend, that for you to achieve a high credit rating, you should always endeavor to keep your credit utilization below 30%. One may be wondering how to achieve this, but the secret is to ensure that you have made full payments of your credit card services each month.

When you have a lower credit utilization ratio, you are simply telling the world that you are a responsible individual when it comes to credit card utilization. This will not only significantly boost your credit rating but will give you good overall credit health.

Try diversifying your credit mix

When we talk about credit mix, we are simply referring to the various types of accounts that you operate including your credit report.

Even though it does not have a direct impact on your overall credit score, I have come to realize that most lenders prefer individual with revolving credit accounts. The more diversified your borrowing habit is, the more likely you are to experience an improvement in your credit score. But while at this ensure that you do not take up loans that you do not need.

Common Loan Application Mistakes to Avoid

bank loansBeing a loan applicant not only needs a financial idea but also relies on raising the right amount of money. In reality, no person can start a business or expand it minus cash flow. A small business owner will face difficulties that end up being a reason for giving up on the business. This result is common even for those who have ideas that could change the world. If you are not a businessperson, you may still need money for a mortgage or other things such as vehicle financing. You have to borrow the money with some intelligence for you to get it. The financial institutions available today are ready to finance you. They only need the right convincing power. Read on to find out the common loan application mistakes to avoid.

Don’t think financial decisions occur in a vacuum

Many people think that the banks will just decide without considering many factors outside the bank premises. The reality is that the bank wants all your details to clarify your suitability for a loan. It wants to know the type of character you present. It needs the documents to back this claim at all times. The information that the lender requests need to be comprehensive and accurate.

Update your financial records

Many people have statements of account. When they present them to banks, they don’t get loans because the records are old. You need to take time to update all your financial statements to show your current income and expenditure situation. The verification process is thorough. Your dated statements will lead to loan denials. You should be honest with the information provided. You must declare all existing loans and income sources so that the bank can have a clear look at your financial situation.

Be clear in your use of funds

Any failed application usually narrows down to an unclear use of funds. You must know where your money is coming from and going at any given time. The biggest mistake is assuming that the lender will figure the thing out. Banks want to see the cash flow. They want to see you spending money on things that help maintain operations and grow your capacity to earn money. When applying for unsecured loans for personal use, they want to see that you have additional revenue to offset the monthly repayments. They want your payslip indicating all your deductions.applying for loans

Failure to know credit ratings

Credit ratings tell lenders the type of risk you pose. When you don’t know your ratings, you may apply for loan amounts and conditions that do not fit you. When this happens, the lender notices and denies the loan. The reports showing your credit rating can help you make changes to your schedule and commitment to repaying other loans. For instance, some loans present you are a very risky borrower while others do not.

Late applications

Submit your applications early so that there is time to make changes and follow-ups. Late applications will leave you frustrated. You make many mistakes of commission when you are late with your request for a loan. You also do not give the bank enough time to go through the process. Early preparation gives you time to check different sources and find the one best suitable for your loan needs.