Your credit score is your financial identity; if you don’t work on improving and maintaining it, chances are that you’ll be left isolated by the financial and corporate world. There are several ways to improve bad credit scores.
Opening accounts that report to the credit bureau or quickly paying off bills of smaller amounts are some ideas that can improve your credit score. To help you understand the credit world and the market dynamics at play, we’ve compiled a list of 5 simple steps that you can take to improve your credit score. We also suggest you get in touch with Versa Business Systems, Maryland, for a detailed discussion about your situation.
Review Your Credit Score
Start by reviewing the credit score and financial activities that negatively affected it in the past. A higher credit score is usually the result of on-time payments, minimal credit inquiries, and older accounts. Missed or late payments and high credit card balance are some factors that contribute adversely to the credit score.
A Revolving Account Balance
A high revolving credit balance results in a considerably high credit utilization rate despite having a good payment history. This adversely hurts your credit score and resolving this issue can tackle the string of low scores. Maintaining a low balance relative to their limits on credit cards and lines of credit will help you improve the score.
A current account works in favor of your credit score. Having an existing account prevents the accumulation of further late payments in your credit history. Contacting a credit management agency or a professional will help you understand the significance of bringing all outstanding bills to the current account.
30% Credit Utilization
Credit utilization is the proportion of credit you’re utilizing currently. Your credit utilization determines the credit score and is one of the most critical factors contributing to it. The best way to keep the credit utilization in check is by paying off all balances in full each month.
If you’re unable to do this each month, you must ensure that the outstanding balance is not higher than 30% of the total credit limit. Eventually, you can work on bringing it down to 10% of the total credit limit, which works in favor of improving your credit score.
Cutting down on hard inquiries is a great way to limit the credit score. Your credit score is negatively affected by frequent credit applications. Applying for a new credit card or mortgage, or auto loan hurts your credit score. While the occasional credit inquiry will not have much effect on the credit score, but frequent searches in the short run mean you’re treading a very fine line.
If you’re looking for professional credit score consultation in Maryland, then Versa Business Systems is the right choice for you. We help entrepreneurs and individuals navigate their financial challenges through various options, such as bad credit debt consolidation loans and new business loans. Contact us to learn more about what we offer or Apply for Funding Now.