Establishing a good financial history and a high credit score are important qualifications for accessing money from creditors. Here are tips on how to be credit-worthy.
Having a good credit rating helps one to become an attractive customer to banks and secure an instant online loan from Slick Cash Loan. A good rating and history does not only facilitate easy access to loans but also guarantees a borrower of a low-interest rate and good deals at all times.
The benefits of a high rating go beyond getting loans with good interest rates to other transactions and activities. “Your credit history can determine whether you get a good job, a decent apartment, a good deal on your cell phone, and reasonable rates on insurance,” Liz Weston pointed out in an article published by MSN Money, titled: “9 Ways to Build Credit from Scratch.” The following are helpful tips on how to position build a high credit rating.
Check Credit Reports for Status
As a first step, it is important for people to always check their credit reports. Regularly checking reports help in several ways including knowing one’s status, correcting errors that may be contained in reports as early as possible, and identifying any issues of identity theft. Credit reports can easily be obtained from available online portals.
Understanding What Goes into Credit Scoring
To be able to build a good financial history and get a good score, one has to understand what goes into the calculation of scores so as to be able to make the right financial decisions.
Liz Weston also identified the same point in her MSN Money article and advised that in order to increase chances of accessing loans, people have to always pay their bills on time at all times. Scores range from 300 to 800. A good or bad figure may be different from country to country but as pointed out by Barrett, it is generally good to have a figure above 700.
How to Use Credit Card to Increase Scores
The way people use their credit cards can increase or decrease their borrowing potential. Barrett advised in her NYT article that it is good for people to have at least a card and plan to use it for a long time. “Keep a low balance generally less than one-third of your credit limit,” Barrett said. Liz Weston made it specific by pointing out that keeping credit use to less than 30% of one’s limits helps in getting the best possible rating. Consumers who do not have much financial history may not have a good rating. Such consumers can however get their figures increased through what is called “piggybacking,” a practice where a consumer is added as an authorized user on a card issued to someone else, usually a parent or a partner.
Opening Accounts and Getting Installment Loan
Though many people tend to overlook the importance of opening checking and savings accounts, such accounts help to improve financial reliability and borrowing potential. Getting a mix of credits types “including revolving accounts and installment accounts (auto loans, personal loans, mortgages) also tend to positively influence one’s financial reliability.
Checking financial reports, understanding the scoring process, knowing how to use cards effectively, establishing checking and/or savings accounts, “piggybacking” and taking short-term installment loans, constitute the basic steps for building a good credit history and score.
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