How to Improve Your Credit Rating

You’ve probably heard it all before, perhaps from your parents, “you need to keep an eye on your credit rating”.  In Western society, the use of credit reports allows certain agencies operating from behind the scenes to gauge your liability value, i.e. – the amount of money that financial institutions would be willing to lend you (for whatever purpose).  Needless to say, short of some miracle / stroke of luck, most people simply aren’t going to be able to purchase a new vehicle, own their own home, or start a business without taking on a bank loan.  Likewise, without a good credit score, a loan officer isn’t going to divvy out the capital one needs either.  So, what’s the solution here?  Pretty much the only thing you can do (short of waiting for that rich relative to croak) is to try and improve your credit score; here are some tips on that end…

Reducing debt(s)

Since your credit rating is directly tied to the amount of debt you have (among other factors), the only sensible thing to do is look for ways to reduce it.  Naturally, this is easier said than done, but even the worst-looking score can be raised with some perseverance.  You can start off by making adjustments to your current levels of debt acquisition; in other words, stop making bad investments or needless purchases and look for additional ways to save each month.  It’s simply not enough to save however, as rising inflation rates and decreases in purchasing power will eat away at any money you set aside, you need to look for additional solid investments which you are sure can merit rock-solid returns and feature very little prospects for losses.  At the same time, if you stumble upon some opportunity to cash in on something extremely popular, by all means do so, but be sure to pull out before the bottom drops out, as they say.

Take the time to study your credit report

Believe it or not, a lot of people simply don’t take the time to really study their credit report in greater detail.  Not only will you likely find very useful information which will allow you to ore quickly deal with those areas which are most damaging, but you might also find errors.  Yes, even reporting agencies and credit bureaus make mistakes and even the smallest details might seriously screw with your numbers.  Typically speaking, things like incorrectly listed late payments and out-of-date data can artificially lower your score.  Assuming you find inconsistencies – be sure to get in touch with these agencies right away to correct these issues.

Add a small personal loan

If you want to raise your credit score (and don’t want to sign-up for a credit card), adding a small personal loan is a great idea, particularly if you need the money for something useful.  Not only will you be able to complete some critical project which might help bring in additional income (like adding a flashy new sign to your business’ storefront), but theses types of diminutive loans are much easier to pay back and the credit rewards are great too.

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