Effective Ways to Build Your Credit Score

A survey from the National Foundation for Credit Counseling indicates that people are more embarrassed to say what their credit scores are than when you ask them how much they weigh. Most of these people are those with bad credit ratings because they failed to settle their financial obligations on time. 

People with good credit scores, however, will likely return a blank stare. They don’t boast about their credit scores either. They do understand that it may be difficult for some people to achieve an excellent credit rating. 

How do these people with good credit ended up that way? They do financial planning really well. People with excellent credit scores don’t involve themselves with financial obligations they can’t commit to. They make regular payments and always pay on time. 

If you’re someone still building good credit, or rebuilding it, there are ways to improve your credit scores. These aren’t difficult, but you do need to be a responsible paying adult. 

Here’s what you can do to raise your credit scores fast, but first, get a copy of your credit report from AnnualCreditReport.com and see where you are. Check whether there are mistakes that need to be disputed.You can dispute errors online through either TransUnion or Equifax. 

After finding out what your status is, start using secured loans. Getting a secured loan means you deposit a certain amount to a bank or credit union, and they allow you to borrow money with the same amount. It’s easier to get secured loans as banks don’t really check your credit rating for this as you have deposited that same amount that would somehow serve as a collateral. 

The money you deposited will be released as soon as you have fully paid your loan. Just make sure you will really pay your obligations on time. It will be better to automate your payments so you never have to worry about forgetting to pay. 

As soon as you establish good credit with them, it will be easier to borrow money again. And you will be able to finally get a higher credit score! 

Next step would be to choose credit cards with low balances. Avoid using credit cards that offer certain terms like monthly or annual fees. Continue shopping until you find the right card. If you absolutely have no choice but to go with these cards, do make sure that you pay them off before end of the month to avoid high interest rates on the card. 

If you have multiple cards, move your balances to the cards that offer the best deals to avoid other charges. Most importantly, avoid maxing out your card as that can affect your credit score. 

Make it a habit to keep checking your credit scores. This way you will know whether it is improving or not. Don’t worry, so long as dues are paid on time, you will begin to see positive changes on your credit scores. 

The two tips above should help lay a solid foundation for your credit score, and eventually help you qualify for either a home or auto loans. And perhaps even both. Just always be responsible with your financial obligations and you will soon be rewarded with an improved credit score.