If you’re being denied credit cards or your loan requests aren’t being approved, it’s high time to improve your credit score so that you can get the best financing options. Here are some methods to help you enhance your credit score so that you don’t get rejected in the future:
1. Accurate Credit Reports: It’s hard to see an F on your credit report and even harder when you know you deserve an A. Therefore, it’s very important that you regularly check your credit reports. Studies have shown that there is a 1 in 5 chance your credit report could have mistakes on it. Get the free copy of your credit report you are entitled to and make sure that all the information is accurate so that your credit score isn’t incorrect.
2. Get a Credit Card: Sometimes this isn’t so obvious, but if you don’t own a credit card, you may end up having a bad credit score due to an uneven mix of accounts in your name. You may also choose to have a secured credit card, which helps keep your credit card bills under control. With a secured credit card, you need to deposit a certain sum of money. This will act as the credit limit for your credit card and will prevent you from overspending.
3. Credit Line Increase: Most banks provide their customers with an option to increase their credit card limits. This will help you improve your credit utilization ratio which is the percentage of credit limits you have used and will ultimately boost your credit score. If your bank insists on further enquiries regarding your credit card before providing you with an option to increase your limit, then refuse the option as a “hard check” on your card may harm your credit scores in various ways.
4. Pay Your Debts Regularly: Increasing your credit card limits will help you increase the denominator of your credit utilization ratio. To further enhance this ratio, which also improves your credit score, you need to reduce the numerator as well. This can be achieved by paying off your debts in a timely fashion. This will also ensure that you have to pay lesser amount of interest as your debt is reducing due to the payments.
5. Collection Account Clearance: At times, your debt collector may stop wanting to report your debts to your credit bureau if you offer to pay back the whole amount of money at one go. Before you approach your debt collector, make sure this is legal; some debt collectors have agreements with credit bureaus to report back your debts under all circumstances. This should be kept as one of the last resorts in the process of improving your bad credit score, in case all others fail.
6. Stop Applying: Although most institutions will provide you with tempting credit options, and provide you with various offers to apply for additional credit cards, it may not be a good idea to always indulge in such offers. It is true that the more credit cards you have the higher your credit score can be, but a hard credit enquiry may cause damage in such cases. In case you are applying for a lot of credit cards in a short span of time you may end up in more trouble than less trouble.
7. Strong Credit Age: One of the easiest and quickest ways of improving your bad credit score is to increase the age of your score. In case you have been having a recent credit score, you can always try and utilize the credit history of your friends and family members by becoming beneficiaries to enhance your own credit history or credit score age. This helps in improving the bad credit score as it will reflect that you have been using credits for a long period of time.
8. Avoid Becoming the Victim: One of the easiest ways to harm your credit score is when a thief steals your identity or uses your credit card for making transactions. This will increase the debt in your name which will affect your credit score. In order to avoid such situations, make sure that you carefully study your credit limits every month and inform your credit card provider with any abnormality you notice. Also, avoid sharing your personal details with anyone.
9. Accounts in Your Own Name: It might be possible that you are not financially independent and depend on your parents or spouse to provide you with financial support. In such cases, you will generally have a joint account with whoever provides you with financial aid. Avoid it and start your own account; having your own account will help you to build up your credit history, which in turn will enhance your credit score. Paying your bills from your own account will contribute to your credit history.
10. Have Patience: There are some cases where people tend to have gaps between good credit scores, especially when faced with unfortunate events such as a filing for bankruptcy. Sometimes the gap between these two occasions may last as long as 10 years and you have to be very patient during this time.
Although you may use these methods to improve your poor credit score, you still may end up needing a loan desperately during these times. In such situations, you can always trust Cash Loans Canada to provide you with a loan. All you need to do is fill out some simple details and provide us with the required documents. You will be given your loan within 24 hours without any hassle or rejections.