How to Maintain A Good Credit Score
Managing debt, cash-flow and paying taxes are all part of adulting. There is no escape from this part of life so instead of fighting it, work with it in order to live a balanced and responsible life. Maintaining a good credit score can help you save money on interest, as this is one of the biggest factors banks use for working out interest rates. Bad credit scores equal hefty interest rates, whereas good credit scores equal lower interest rates.
Factors That Affect Your Credit Score
Banks and lending institutions use a variety of factors to determine your interest rate, which can include:
- Credit History – if you have never leant before, this will affect your score negatively
- Late Payments – if you struggle to pay your accounts on time, this will also count negatively against you
- Minimum Payments – if you only pay minimum installments, some creditors deem this in a negative light
- Individual Involuntary Arrangement or Bankruptcy – both circumstances affect your record negatively
- Court Judgements – if creditors had to revert to legal proceedings to get their money from you, this too will tarnish your score
- Credit Access – if you use credit available to you often or loan huge amounts constantly, this will provide a negative score too
- Credit Frequency – as mentioned above, credit applications that are frequently made on your behalf equals a bad score
- Refused Credit – if institutions have refused you credit, this too will mean a bad score on your profile
The above factors should be carefully considered each time you apply for loan bad credit approval from LoanPig, as well as when you pay the credit off. Lenders will review your credit record as above to ensure you are a responsible lender. Being mindful of these factors will assist you with keeping a good credit record on a continuous basis.
Manage Your Debts Properly
The bottom line is to pay off your debts as soon as possible, in slightly bigger amounts and on time each month. Even one late or missed payment on your behalf will tarnish your credit score and push future interest rates up on lending exponentially. Ensure there are sufficient funds available in your account when payments are set to be deducted. This is another great tip to keep your credit score in tip-top shape.
Don’t Live Above Your Means
The biggest temptations to overspend are the things you want but don’t necessarily need. Keeping up with the Jones’s is a sure-fire way to be over-indebted when you are spending money you don’t have on items you don’t need. Live within your means and be frugal with your money.
You work hard for your money so treat it as such. Make your money go further and try save 5 to 10% of your income monthly for emergencies. A healthy savings account will affect your credit record in a positive way.
Budget properly, balance your income with your expenses, and work according to a strict budget. Avoid dipping into your savings account when possible and stay financially savvy. Buy luxuries when they are on sale or save properly for big items to avoid using credit unnecessarily. Live your best life by being financially responsible, money savvy and a proud credit score keeper.