Credit rating

Whether buying a car, a home or just trying to get the best rate on a personal loan or credit card, you need a good credit rating. Many young people today have some sort of debt after leaving university and this can impact your finances later on. If credit rating is nonexistent or lacking, there are things you can do to improve your rating.

Here are a few quick tips from our team:

Pay bills on time. This may sound simple, but nothing dings your credit report worse than slow pays and delinquent accounts.

Pay off old debt. Funnel extra income toward the oldest debts as well as the smallest balances and clear up as many things as you can before looking for a major-purchase loan.

Don’t close account with good histories. Positive open accounts help your credit rating, so don’t close accounts when they’re paid off. Just leave them inactive.

Don’t max out cards. Cards that are nearly at their maximum look worse on a credit report than cards that have plenty of wiggle room. Maxed out cards indicate that you could have a financial problem.

Don’t apply for new credit you don’t need. Having too many new accounts or requests to view your credit history can hurt your credit rating, so don’t apply for any other new credit while trying to get a loan for a major purchase.

Rehabilitate bad credit with an installment loan. Taking out a small loan and then paying as agreed adds positive info to your credit report, improving your credit rating.

Wait. Bad things drop off your credit history at set times, usually seven or 10 years. If a negative entry will drop off soon, wait to apply for a major purchase until it does.

Be sure you have the credit reference agencies correct any wrong or outdated information you find so that your report and your history is as clean and accurate as possible before you use it to apply for a loan.

Remember that even a small positive or negative change to your credit history can make a big difference in your overall credit score because of the way this number is calculated.

Read more