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It’s hard to overstate the value of having great credit.

Like a master key, it opens the door to a wide range of opportunities! Everything from mortgages to car loans become easier to acquire and, more importantly, the financial products you gain access to are much higher-quality as well.

Ultimately, thanks to the financial savings on interest you encounter, an awesome credit rating’s your golden ticket to a new and improved financial situation.

However, it’s important to recognise that credit scores aren’t set in stone (this can be a good or a bad thing, depending on your personal circumstances). Far from being fixed, they’re in a state of constant flux, shifting up or down depending on a wide range of factors.

Are you wondering how to increase your credit score so you can tap into the myriad benefits on offer? Let us help. Read on for an in-depth look at how to improve your credit score in 2022 and beyond.

1. Access Your Free Credit Report

You have to know and understand any problem before you can solve it, right? That’s why the very first step to improving your credit score is to access your free credit report. With this free report, you’ll be able to check your credit score as it stands and see (among others):
• Your repayment history
• Your public record (including things like court decisions and bankruptcies)
• Any debts overdue by 60+ days (i.e., “defaults”)
• The number of times someone, like a loan officer, has checked your credit (too many inquiries can damage your score)

2. Pay Your Bills on Time

When financial times are tough, paying your bills is never easy. However, it’ll definitely make a major difference in the quest to increase your credit score.

Missing monthly payments is the main reason peoples’ credit rating suffer, and lenders are much less likely to offer someone a loan if they can’t trust them to meet repayments on time. And the late penalties you get only make matters worse. As your debt increases, your ability to repay it takes a hit. This leads to more missed payments and a vicious downward spiral developing.

You can combat this predicament by setting up automatic online payments. It’s also an effective way to make your repayments on time, every time, without having to think about anything! If your credit card company only lets you pay either the full amount of minimum payment each month like this, set up the minimum and pay off the rest ASAP thereafter.

3. Be Careful with Credit Cards

Many people who struggle with bad credit view credit cards as something akin to the devil! Yet that couldn’t be further from the truth. In fact, having and using these little pieces of plastic is a fundamental way to build credit – you just have to be sensible about it.

The issue comes down to paying off whatever debt you accrue. Your credit cards will soon work against you if you start missing those monthly repayments. By transferring funds straight into the account to pay it off, you should stay clear of trouble and enjoy the many rewards of buying things on credit instead.

Another related factor to consider is the number of credit cards you have. Although they come with many benefits, less is sometimes more in terms of how many you should use. Why? Because lenders see frequent applications for new cards as a sign of financial distress. That’s why it’s worth waiting until you actually need another card before adding a new one to your wallet.

4. Keep Your Unused Accounts Open

Now we know that having multiple cards on the go at once can spell trouble, it might be tempting to close any credit accounts you no longer use. But don’t do it just yet. Assuming there’s no debt on them, keeping unused cards in your wallet is actually one of the simplest and easiest ways to improve your credit rating.

It may seem pointless, but those accounts will be establishing a history of positive credit for as long as they remain open. In other words, you’re steadily increasing your credit score without actually doing anything.

5. Consolidate Your Debts

It’s really important to note that our previous point only applies if your credit cards are paid off – if your accounts are in the red, leaving them open is a recipe for trouble. Not only can you expect your credit rating to fall, but having to make repayments on numerous cards at the same time can also take a big financial toll. That’s where something called debt consolidation comes into play.

Basically, some lenders will let you buy out your other debts and combine them into a single loan. By consolidating your debts into the card with the lowest rate of interest, you can often save a sizeable amount of money.

Furthermore, having fewer monthly repayments should make your finances easier to manage. And that in turn should reduce the likelihood of missing them! Get ready for a new and improved credit score as a result.

Now You Know How to Increase Your Credit Score

If you’ve been wondering how to increase your credit score, then we hope this post has proved useful! Keep the tips in mind and you should be one step closer to making it happen. Trying to get a loan and don’t have time to improve your credit?

We can help. Contact us today to find out more.

Disclaimer: The information in this article is only intended as a reference. Please always seek professional advice from trusted sources before making significant financial decisions.