Your credit history determines your eligibility for a loan. A poor credit history can indicate that you have a large debt pending to be paid. This can look negative to loan providers and may discourage them from approving your loan.
But don’t worry. It’s extremely easy to change a poor credit history into a good one. All you need to do is follow these steps:
5 Super Easy Ways to Improve Your Credit History
Set Reminders for Bill Payment
The most common reason for a poor credit history is the delay in making payments. If you’ve found yourself having missed deadlines or you haven’t been paying the full amount on time, it’s time you start doing so.
The best way to do this is to set up scheduled reminders to make the payments. Many loan providers allow you to create automatic loan repayments.
Keep a High Credit Limit With Low Credit Utilisation
Banks give a high credit limit to those who have a steady stream of income. A high credit limit indicates that you are in good financial standing. But although you have a high credit limit, it's essential to use as little of that credit as possible.
High credit utilization and overdrafts show that you spend too much and may not have any savings. It’s best to spread the credit out on different cards to make your utilization rate appear lower.
Do Not Apply for Any New Credit Cards
While on the subject of credit it’s imperative that you avoid applying for too many credit cards. 1-2 cards are fine, but anything above 3 can make you look like a spendthrift to the loan providers.
Human psychology is simple. Too many credit cards increase the temptation to spend. Remove this temptation by sticking to just 1-2 cards.
Get the Mistakes in Your Report Corrected
Sometimes, the people who create your credit report may make mistakes due to manual errors. Additionally, if you haven’t reported all your incomes and expenses, the report may contain only half the information. All this can make your report inaccurate.
Before you approach any loan providers, take a look at your credit report and have it corrected immediately if you notice any discrepancies.
Speak to Experts for Advice
Finally, if you find it challenging to manage your finances, speak to experienced consultants for assistance. At MoneyShop, not only do we provide personal loans but we also help our clients plan for their loans by offering tips on improving their credit history. Contact us for more information.