Making your payments on time and in full demonstrates that you are a responsible borrower. Making payments on time is not only for loans - but all your bills, including for your phone, utilities, rent and anything medical. Altogether, these typically impact your credit score more than any other information in your credit report.
As such, take note of your repayment dates and make sure you have enough money available to pay each of them ahead of those dates! A recurring entry in your phone calendar would be a useful way to keep track.
Looking for an alternative? Consider using GIRO (General Interbank Recurring Order) where possible, to make sure payments arrive on time. For this, you’ll need to have the money in your account.
The ratio of debt to your credit. This is the second most influential of the credit-score factors. Working down your credit card balance to a low utilisation score will improve your credit score. Ideally, you should aim for a debt-to-credit limit ratio between 0 to 20%. For example, if you have a card with a $1,000 limit and a $200 balance, your utilisation rate is 20%.
Tip! You shouldn’t cancel your cards, or other credit lines, once they are paid off (unless you are paying fees). This decreases the credit available to you, worsening your debt-to-credit limit ratio since they use all your balances and credit limits added up. As a result, you could find yourself paying off credit cards but see your credit score getting lower.
Data shows that consumers with longer credit histories are less risky borrowers. As such, think twice before closing the accounts of old credit cards in your wallet, or opening numerous new lines of credit. Both of these actions will lower the average age of your credit lines. You can keep your older credit lines active by making small purchases on them every now and then (and paying them off quickly).
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Try limiting the number of credit lines you have open. This includes mortgages, car loans, credit cards, education loans and personal loans. Also, put a limit in place for manageability purposes. Keeping on top of your credit becomes much easier when you only have a couple of credit cards. Trying to access a lot of credit in a short space of time signals a risky lender to the potential borrower.
Put in the work to maintain a clean credit report, but don’t open new lines of credit just to boost your score. Do not become obsessed with your credit score, as you'll become distracted from achieving other financial goals.
Any default and bankruptcy proceedings are permanently displayed in your credit report, so be aware of this before you start opening credit lines.
You can find these details in your credit report.
Here are some codes for you to look out for:
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On top of the factors already discussed, here are a few others that don’t matter to your credit score – but may affect your ability to obtain credit:
It’s good to regularly check your credit reports and scores and to take appropriate action for any red flags that may come up.
HOW TO MAXIMISE YOUR CREDIT SCORE. COMPLETED. ✅
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