Your credit or FICO score is the measure of your solvency and creditworthiness. The rating acts as the pillar for loan approval, especially if you are at the brink of availing a personal loan. Ensure that you check your FICO score and improve it, before opting for a personal loan.
If you’re a potential borrower, this article might just be the harbinger of good news for you. Read on to know how to repair bad credit in time for that loan!
Improving your credit score in such a short period of time may seem impossible, but with these five tips for improving your credit score you will be closer to your ideal credit score within 30 days.
1. Reduce Credit Utilization Ratio
One of the pro tips in credit counseling for individuals with a relatively higher score, who intend to keep it that way despite a few delays in payment history is to maintain the credit utilization ratio below 30%. For example, if your credit card limit is $100,000, avoid spending more than $30,000 on your card.
Maximizing credit utilization is an important step towards credit repair.
2. Pay Your Bills On Time
The most important step towards credit score improvement is to pay off your credit cards, loan EMIs and other bills punctually. It is even more beneficial if you can clear them before the due date.
This proves your solvency as well as creates eligibility for higher credit limit, thus boosting your credit score. Make sure there are no delays or missed dues in your payment history!
3. Get A Credit Card
One of the most important aspects in determining credit score is the length of credit history. No credit history equals no payment history which means no high or low credit score. A strong credit history is essential to determine your creditworthiness and allows you to secure greater loans at low-interest rates.
Therefore, getting a credit card is inevitably the first checkpoint if you want to know how to build a strong credit history. make sure to get a credit card even if you don’t intend to use it. Securing an interest-free credit for often 45 days and more, is a mode. This allows you to receive a credit score and improve upon it, gradually.
4. Request For An Increase In Credit Card Limit
Once you have managed your bills and reduced your credit utilization ratio, the next step, according to expert credit counseling, is to bump your credit card limit. If you have followed the previous steps diligently, this shouldn’t be an issue for you and most lenders would happily oblige you.
An approval for a higher credit card limit signifies responsibility, thus helping in credit repair. However, make sure to not be tempted by the raise and keep your credit utilization ratio below 30% at all times.
5. Choose A Secured Credit Card
According to experts in credit counseling, the simplest way for a credit repair is to opt for a cash-backed credit card. This can be done by depositing a one-time amount equivalent to your credit limit or a bit lower.
This is a foolproof guarantee of repayment that improves credit score fast. A secured credit card is also a great alternative for first-time users with no prior credit history.
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Credit repair is a marathon, not a race. You must be patient and strictly follow your credit counseling and guidelines without giving in to the temptations. The rewards of improving credit with credit counseling will be lucrative towards achieving your financial freedom. Want to start your credit repair journey? Get in touch with experts for credit counseling at Xander Financial.