Many loans are not sanctioned due to a low credit score. But here are many ways to fix a low credit score. Good credit score even helps to get loans at a lower interest rate.
A default in any payment leads to a low credit score, to fix this, it takes a long time. But in this article below, you'll find 10 simple ways to increase your credit score and to make it eligible for getting a loan sanctioned.
10 Ways to Boost your Credit Score
1) Reason for a bad credit score
To understand credit score, you need to know how it works. Some of the reasons for a bad credit score are not paying bills on time, bad credit history, etc. You can get better loan packages with a credit score of 750 than 600.
2) Keep the credit score companies' contact information
If your credit score has been mistyping or miscalculated, then you have the full right to contact the bureau of credit score companies for correction.
3) Reviewing the scores and reports
To fix your credit score, you can easily check the reports thrice to find an error. Even one error leads to a lower credit score, and it's very difficult to regain a good score again keep reviewing your reports from time to time.
4) Removal of negative comments from reports
This step is beneficial to increase your credit score. Over here, the investigation on any case is done by the credit bureau. It only tells us the result after a detailed follow-up. The company passing negative comments will be contacted first, and if no response is heard, then the comment is automatically deleted.
5) Get a secured credit card
If you are not able to get an unsecured credit card, then you can easily avail a secured credit card after depositing some amount of money. Then use it like a normal debit card, and at the end of the month you must pay all your fees timely, and hence this will make up your credit history.
6) Limited use of credit cards
Once the limit of a credit card is exhausted, then it will be much expensive to get a loan at a stable interest rate.
Using your card to pay off debt is not going to solve the problem; rather, it will increase it.
7) Add good credit accounts
In order to improve your credit history, you must open different credit card accounts and pay their full fees timely to make a proper credit history.
8) Try to become an authorized user on some other credit card account
If you cannot have your credit card, then you can take the authorization of an account of somebody else. It can help you build a credit history. You need to take financial responsibility in the past.
9) Do you want to avalanche or snowball your debt?
Paying off your credit must be the primary objective for anyone who is taking a loan. Paying off debt from higher interest rates first is avalanching. Paying off the lowest interest rate first is snowballing.
10) Copy of settlement letter
A copy of the settlement of loans has to be provided to the credit bureau to give them proof that your debt is settled.
Bad credit score improvement needs time, patience, hard work, and responsibility. If all these 10 steps are followed, then you can easily achieve your credit score.