How to improve your credit for 2016

Your credit score is very important as it determines how willing lenders will be to lend you money. A good credit score will help you get better mortgages, credit cards accounts, and other items such as car insurance, mobile phone contracts, bank accounts, and other financial products. A bad credit score will make life hard for you when trying to get a loan or when trying to get the best deal when purchasing financial products. If you intend to improve your credit score in 2016, below are some tips; Make sure you settle your bills on time  Late payments have a huge negative impact on the credit score. It is also very easy to form a habit of making late payments. A habit of delinquent bill payment will only make your credit record worse and no lender will want to deal with you. You can prove to lenders that you are a responsible borrower by taking a loan and paying it back within the shortest time possible. This could require you to take a credit card that has a high interest rate and spending minimal amounts while using the rest to clear the loan. As such, there will be no interest charged for the loan. If you are having difficulty paying off a debt, you could request for smaller repayment amounts that you will be able to handle and avoid messing up your credit score. Open and apply for new credit accounts only when it is absolutely necessary Many people open credit accounts with the notion that it will provide a better credit mix for them. This usually does not work and it has no effect on your credit score; it might actually end up creating more problems if you are not able to manage the credit card accounts. If you have several credit accounts, it is important that you close down any accounts that you do not use regularly. Making many credit account applications in a rush is often seen as desperation by the lenders and they may end up denying your request. A denied request will be a black mark against your credit score that can take you a long time of effort to erase. It is prudent to only apply for credit that you are very likely to get as you do not want to be turned down. Credit Card balances and any “revolving credit” should be kept as low as possible  A huge outstanding debt will negatively reflect on your credit score. It is vital that the lenders see that you do not use up all the funds each month. It is wise to under-use the credit card and do not use it for every other expense. A 10% credit use ratio will help to maximize the FICO score. Make sure all your details are correct It is important that there are no errors on your file. Common errors include other people’s debts or payments. It is important to ensure that the debts are registered to your correct name and address. In case of any errors such as payment amounts, you should immediately dispute the errors through Experian, Equifax, or TransUnion.