Having a high credit rating favors that the entities feel more comfortable when lending money, for example in the contracting of an online credit , while they can even offer higher benefits, including a lower rate. However, if the rating is low, the cost of the credits could increase. These values, according to the score, a software analysis company, range between 300 and 850 points, and improving this score could take between 1 and 2 years.
Steps to follow to improve the credit rating
It is not always possible to maintain a good score, so it is advisable to take a series of measures, some of them quite logical, that will help to improve this rating.
Make payments on time, without exception
Making payments on time, every month, without leaving any unpaid installment is paramount. Delays in payments are one of the main reasons why you can receive a negative rating. Failure to make a payment can have an immediate negative impact.
Maintain low balances of credit cards and fast loans online
A factor that is considered dangerous and really harmful to the qualification is having a balance of 35% or more of the limit of credit available on each card. To improve this point there are two options. The first is to make payments and amortize debt to keep the balance of the card low. The second option is to increase the line of credit, with which the percentage of the available will be reduced.
Do not close accounts that are not used
Maintaining an account with available long-term credit increases the rating, maintaining a long positive history with each entity will report benefits.
Apply for credit online only when necessary
It seems obvious, but sometimes situations can arise that are detrimental to the rating but that may seem beneficial in certain cases, such as the possibility of transferring part of the available to a current account. Although it is not needed at that time, it is considered a juicy opportunity to be able to grant a whim and this request can be accessed, with which the debt will be increased and the score will decrease proportionally. Therefore, the best measure is to request fast credits online only when necessary.
Follow the credit rating
Today it is easy to access information to see the qualification of any person for free, which will offer the opportunity to correct errors in a report and eliminate outdated data.
By monitoring the score and its evolution it is possible to discover possible abnormal alterations, such as identity thefts. At Christmas time is when the cards are used the most, which increases the possibility of some theft or cloning of them. Sometimes, when so many expenses occur on these dates, the victim does not realize what happens until weeks later. This situation can be terrible for the score because the available one will be diminished and the balance percentage between debt and available will increase, affecting negatively. It is essential to pay attention also to identity thefts, since the negative information of one person can be maliciously assigned to another, being seriously affected by these imbalances.
Even if no theft or duplication has occurred, the simple fact of having created a new card to take advantage of a discount in a store could lower the rating for the following year, and it is already known that a low rating can lead to an increase in costs of the credits.
Filing for bankruptcy is one of the worst things that can be done when we talk about credit rating, since the drop in the score will be large and immediate. In addition, the bankruptcy will continue to affect for 10 years, which could prevent the granting of quick loans in the future.
Avoid consolidating credit card debt
Although it may seem that it is more convenient to combine all the payments in a single installment of a card, in terms of credit rating , it is better to distribute the debt among several cards with lower interest than one with a higher credit limit but paying more interest. Another alternative to liquidate the card with a high interest rate could be to refinance the mortgage or request fast credits online .
Negotiate with creditors
Many creditors are willing to renegotiate and listen to their clients because otherwise they could find situations of default, which would harm the rest of their business opportunities. They need to have debtors who pay regularly to be able to use that revenue in new transactions. It is always preferable to contact the creditors or collection agencies to propose possible solutions or alternatives to this unfavorable situation.
Do not ignore other loans or quick credits
As already indicated above, having several loans or lines of credit with low balance and paying regularly the fee is the most effective way to improve the rating. You can always be supported by a new free credit card that will not be used but that increases the available credit and, therefore, decreases the balance percentage.
These measures are, for the most part, logical and even intuitive, and present a good guide, a way forward that will help improve the qualification while benefiting their effectiveness to pay off debts and end up paying all the loans efficiently.
For many people, the fact of having several loans and credit cards, can be an embarrassing situation because they do not feel comfortable managing amounts, transferring from one entity to another, playing with the movements every so often. For these people the ideal situation would be to end one or two lines of credit and use them when necessary and not be thinking about what installments have to be paid each month. Faced with this situation, the guide described above can be a help to get amortize all those credits left over and can serve to achieve that objective pursued.
In short, keep the balance of cards and lines of credit online , keep the oldest credits, monitor the rating, avoid bankruptcy and negotiate with creditors.