Smart Steps To Build A Credit Score
In recent times, credit rating is one of the major factors considered when rating an individual at different circles. Financial institutions, credit stores and landlords use this as a measure for potential clients to ascertain the risk involved. This makes it a major determinant in accessing financial and credit services from various circles. The score is determined by ability of a customer to secure credit and repay within the provided terms. In this regard, it is the ability to repay for the credit advanced within the agreed terms that increase the score while failure to do so decreases the score significantly.
The first step in building a credible credit score is to have access to credit facilities. However there is need to ensure amounts borrowed are within individual means to ensure consistent and full repayment. While it is important to have access to credit facilities, not borrowing increases the rating with indication of a responsible borrower who only access in time of need and not because of availability of credit.
Borrowers are faced with majors risks among them occurrence of fraud. To avoid the disappointment that may arise from fraud, the borrower needs to keep checking their credit reports to ensure it is consistent with the amounts borrowed and repayments being made. Raising the issue with the lender is the best approach to deal with any case of fraud and this ensures it is sorted to reflect the agreement in place. The platform provided to solve the situation is through writing a letter of credit dispute to the lender and make a follow up to ensure it is received and effected.
Borrowers need to know and set the best times to apply for credit. Credit facilities are available from different quotas for the client but not mandatory that they all have to be used. Making applications for credit facilities follows what is referred to as hard enquiry and is reflected on the score. Avoiding this impact can be achieved through making a soft enquiry that does not have a reflection on the ratings.
Making payments on time is a great way to improve individual ratings for the borrower. This can be effecting through use of auto payment options or setting reminders to ensure you are well aware of the time to repay a loan or settle a bill.
Borrowers do not require to treat credit as a source for better lives. Borrowers need to borrow only that which is important. Seeking for credit that is below the available limits is a sure way to raise individual ratings. Borrowing the amounts that are below the set limits ensure the borrower is better positioned inn making repayments and in such way increase the credit ratings for higher loans when need arises.