Who does not want to have a good credit score? A good score helps you enjoy a better lifestyle as you can take out loans at suitable terms and conditions and even lower your insurance premium rates with a good credit score. Therefore, you should always try to improve your credit score and maintain it if you already have a good score. Here are 4 ways by following which you can actually unlock the key of getting a better credit score.
- Negotiate for a suitable payment plan – When you are facing some kind of financial hardship and are behind on your monthly debt payments, you can explain your current situation to your lenders/creditors for a revised payment plan. In most cases, the lenders/creditors will agree to negotiate since hiring a collection agency may be a costly affair. To show your eagerness to make the payments, you can present a revised payment plan, which they may agree upon. However, always remember that timely payments and less debt will help you to have a good score.
- Try to pay more than the minimum required – The credit card companies will not take any actions against you if you continue making only the minimum payments every month. However, the credit bureaus will take into consideration the time you have taken to clear a debt. Moreover, you will also end up paying much more on the interest if you continue making only the minimum payments. Therefore, try to pay a little more than the minimum on your credit cards if your present financial condition doesn’t allow you to pay more.
- Use a debit card at times to avoid additional debt – Though a credit card or credit cards can help you achieve a good score, yet sometimes they lead to debt problems. So, when you are already in debt, it is better to use the debit card(s) sometimes, in order to avoid piling on debt. Using debit card is a better alternative when you do not want to carry dollar bills and at the same time, don’t want to add on debt to your cards. When you use a debit card, the amount gets deducted from your account instantly. However, do not use your debit card when safety is your concern, that is, where you can be a victim of identity theft.
- Provide your comments on your credit report – It might be that you could not make your monthly payments on time as you had a temporary disability, or there is an error in your credit report for which your credit score has lowered. In such situations, the first thing what you need to do is contact the specific credit bureau and ask them to make necessary changes. You will have to support the fact with necessary documents. Along with this, you should contact the credit bureau and add comments at the bottom of your credit reports. Though these comments won’t help to improve your score, yet your future creditors/lenders may take these into account while deciding whether or not to grant your loan request.
Above all, what you need is discipline and patience. You need to plan a suitable budget and follow it so that you can save money every month and make the necessary bill payments on time. And, you need to have patience since your credit score cannot increase overnight; to increase your credit score you need to add positive items in your credit reports continuously. Doing so, with time, you will definitely unlock the key to a better credit score and will also put your foot forward towards building a better financial future.