When it comes to credit scores, they are either something you are proud of or something you are ashamed of. Either way, they are generally something which people don’t like to talk about. Until, of course, it comes time for you to be denied credit. Then you want to go one step further and pretend your score doesn’t exist.
If you have ever had one of these moments and are afraid to show your face at the store again, below are some great tips to help you improve your creditworthiness.
Stop and Take Heed
The first thing that you will want to do is to get an idea as to your current financial situation. This means sitting down with all of your invoices and your expenses and creating a budget which shows you just how much money you make each month against your ongoing expenses.
Be Sure Your Budget Is Realistic
When you are creating your budget to help allocate your money better and prepare for savings, it’s important that you make it realistic. One of the contributing factors to your credit score is how consistently you can save. This is easily impacted if you are constantly having to take out emergency money from your budget or taking funds to allocate for other items.
Instead, plan ahead. For example, allow yourself some money to enjoy a night out on the town or to shop the Groupon Coupons page for J Crew. By doing this, you can keep a consistent level of savings while also staying on budget and enjoying a social life.
Bring Your Debt Together
Paying the minimum amount required for each credit card, store card, and a loan is the doing nothing for your financial situation expect making matter worse.
Instead, look to take out a debt consolidation loan.These loans work by transferring your existing lines of credit into one larger loan with a single monthly repayment and set interest rate.
This is a great way to not only make effective payments towards your debt but allow you to also see your debt reduce each time without rising again the next month.
Switch on Direct Debits
Similar to your credit score is linked to your ability to consistently save, so too is it connected to how often you pay your bills. Even one bill paid a day late can negatively affect your score.
The best and easiest way to prevent this is to utilize direct debits. Start by creating an account which you use only for your direct debits, and transfer your allocated sum of money into each pay period. This way, you never have to worry about paying a bill late and you can benefit from a healthier credit score.
It’ is important to remember that improving your credit score isn’t something which you can do overnight. SO be sure to stick with it and don’t be disheartened if you feel like it’s taking too long. Take a look at your payment plan and keep your eyes on the prize of financial freedom and an improved credit score.