Credit score is one of the important factors which determine your financial stability. You should maintain good credit ratings i.e. 700+. Lenders consider your credit and employment history before approving the loan amount. If you have good ratings you can enjoy various benefits like
- Low interest rates.
- Negotiating power
- Attractive mortgage and refinancing rates
- Gives mental peace
- can get hefty amounts
- good deals
Maintaing good credit rating is an overwhelming task. Two important factors where your credit plays major role is
- While borrowing loans. Creditors review your ratings which reveal your responsibility.
- Employers may check your credit rating in the screening process.
In today’s economy, never underestimate the value of credit ratings. With the changes in economic crisis, banks are paying much attention towards borrower’s history. No matter what kind of loan you request for, either mortgage, car or credit loan. Your lender first track your credit ratings from any of the reporting agencies like Trans Union, Equifax, FICO etc. your score will be determined by these agencies based on various factors like income to debt ratio, late payments, missed payments, delinquencies etc. If you’re a person with poor credit score. Don’t be panic. It is you who is responsible for poor ratings. Realise your mistake and follow necessary steps to improve your credit ratings. It is you, who can shape your financial life. Here are a few tips to enhance your credit score
Three important steps which you should follow right now
- Reviewing credit report: You should check your credit reports periodically. This serves as a basic step in determining your credit score. If you find errors in your report consult your lender immediately. Make sure that all the payment details and amount balance has been entered correctly.
- Setup payment reminders: Making your payments in time is the ultimate tip for improving your credit score. Recent survey states that 70% of people have poor ratings because of late payments. Most banks provide payment reminders through online banking. Take the advantage of this situation.
- Reducing the amount of debt: Reducing the amount that you owe is the best technique to follow. Your first gaol is to eliminate too many credit cards. Check your credit statements and interest rates and maintain minimum payments.
- Pay bills on time: Take the advantage of technology. These days you can make your credit payments through mobiles. There are various payment applications like square, PayPal, Doxo etc. which alerts you about upcoming payments.
- Avoid missed payments: Don’t ignore your p[payments. Missed or late payments usually demands high cost.
- Seek advice: If you’re unable to manage your credits take the help of financial advisor. Most expert’s advice to take payment protection insurance in connection with loans which helps you to make timely payments in case of unemployment or illness. You can compensate the amount using ppi claims.
- Don’t close your old accounts: Never close your old accounts. Previous accounts with good credit ratings helps in analysing your credit status and may enhance your credit score.
For any information about credit scores and any other financial problems please contact HMRC helpline.