How to maintain clean credit score

A good credit score is a must if you want to apply for business loans or need to apply for a mortgage. Though there are some financial companies that do entertain the loans and mortgage applications of people with a bad credit history, it is still always better to have a clean sheet in order to get loans at low interest rates and an array of other benefits. Here are some ways by which you can improve your credit history. 1. Need to have an active credit account: A zero credit history is not a good thing because the lenders will then not be sure if you will repay the loan amount. Lenders are interested in understanding your borrowing and repayment habits. So make sure that you have an active credit history. You can do this by opening a utility account or a mobile phone plan in your name. 2. Make all payments on time: This is one of the most crucial factors to get a good credit score. You must make sure that you pay all the bills on time. Avoid overdue and late payments under any circumstances. If you are into the habit of not paying bills in time then you will surely tarnish your credit history. 3. Apply for credit only when you need it: If you have the habit of enquiring for a credit card or a car loan or personal loan for no reason, then remember this will have a negative effect on your credit history. All the enquiries that you make are being stored in your credit report. If you happen to make too many enquiries in a short time, then you are pushing your credit score on the negative side. 4. Thorough research is a must: Before you apply for any product like a loan, credit card etc it is important that you research and analyse all the pros and cons. You must check thoroughly if the product is right for you. Take into consideration everything like the interest rate that is being charged, repayment terms and conditions etc. Keep in mind that after opting for the product if you think it is not what you want and if you end up not paying for it then you are landing yourself in big trouble. 5. Self evaluation is a must: It is important that you evaluate your credit score from time to time. You need to follow this practice on a regular basis. Only if you do this you will know where your credit rating stands. You will also understand the areas where you need to improve. You will also know if you have defaulted any payment which has affected your credit score. By evaluating your credit score on regular intervals you will be able to take corrective measures to improve the same. Whenever you apply for a loan or a credit product your credit score is the first thing that will be taken into consideration. If you do not want your credit score to suffer then make sure that you follow the above tips without fail.   Sources:

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