A lot of people, who are interested in borrowing money for the first time in their life, don’t know about common terms that are associated with the borrowing and lending industry. Your credit score is the most important thing, especially when it comes to borrowing money. Basically, the credit score is a number that determines your creditworthiness. In simple words, it shows whether you are a reliable person to give money to or not. If your credit score is bad, lenders and banks will refrain from giving you a loan. Many banks and lenders have very specific requirements for giving out loans to their customers. If you don’t meet the eligibility criteria, you won’t be able to file an application.
If you are looking for information from My Credit Monitor, you will notice that a lot of it relates to your credit rating. You can get a free credit report that offers in-depth information about your creditworthiness and also provides information about where you are lacking. For people who have an adverse credit rating, it’s important that you take remedial steps in order to improve your rating. Here are some important tips that will help you improve your credit rating.
Watch Your Credit Card Balances
One of the most important factors that affects your credit rating is your credit card balance. Most people don’t really think twice before making a purchase using their credit card. There are two main things that you need to be mindful of here: the amount of credit extended to you and the amount that you are actually using. According to one study, the optimum figure is to keep it under 30 percent. If you want to boost your credit rating, it would be a wise idea to pay your balances and keep them as low as you possibly can.
Eliminate Outstanding Balances
If you take a close look at your credit card statement, you will notice plenty of frivolous purchases that can be regarded as “nuisance balances.” If you have small balances on a number of different cards, it would be a wise idea to eliminate them and only stick to one. Gather all of those credit cards that have tiny balances on them, which are accruing interest for no reason, and eliminate them!
Use the Calendar to Your Advantage
If you are looking to purchase a new home, take out a student loan, or purchase a car, it’s a wise idea for you to do your shopping within a small time period. Every time you apply more credit, it has a slight impact on your credit score that’s going to last for a year. If you space your purchases apart by several months, it’s going to have an even worse impact on your credit score. The length of the shopping period affects your credit score, so it’s best if you keep it under 14 days. These are some basic tips that will help you improve your credit score by a significant margin.