The Factors Involved With A Low Credit Score And How To Improve It
The number one thing you don’t want to hear when visiting a bank in hopes to apply for a loan is that you have a low credit score. In many cases, this is usually what happens as most individuals don’t know what credit scores are or how to manage it in a proper way. Most people are also not informed about the factors that affect it.
Your credit score is important for when you’re trying to obtain a loan for assisted payment for wither your student loan, a new house, car, or anything you can’t afford in full upfront. Needless to say, it’s something that we all need to have a look at, at least a few times in our lives, which mean it affects everybody.
Credit scores are mainly affected by your credit history. This includes the duration thereof, as well as whether or not you’ve paid all of your bills on time. Other factors that affect it include having too much debt and not being able to pay it back.
Why is your credit score lower than it should be?
Your credit score can be low for various reasons. Since your credit history gets renewed every six years, the past six years of every credit payment will reflect and have an effect on your credit score, which means, if you’ve missed a payment three years ago, chances are it’s will affect your score till this day.
Depending on how many different accounts you have, the more you have or the higher they are, generally also affect your credit score. Using all of your credit at once also leads to a low credit score.
How to improve your credit score
The number one reason why you should work towards improving your credit score is so that your chances of being granted loans or credit for certain things are approved.
You can improve your credit score by checking your report on a regular basis to ensure it is correct, by ensuring your payments are up to date, by paying your creditors automatically each month instead of making traditional payments and closing unnecessary credit accounts.
Improving your credit score usually starts after three months of consistent payments. In severe cases, such as lawsuits, making late payments or bankruptcy can stay on your record for up to ten years.
Considering what it means to have debt, it seems less appealing, doesn’t it? Choose a debt-free life today and make a difference for the better in your life. Credit Matters provides debt counseling services to help manage your debt.