Perhaps you’re wondering why your credit rating is so important? Well, since you’re reading this we can only assume the answer to that question is a resounding YES. The truth is, our Western economics systems are based largely on debt accumulation. Even entire nations have credit ratings, which in turn, allow them to borrow money from other organizations at certain rates and so on and so forth. As an individual, you’re no different. Governments, in cooperation with central banks, assign a sort of “value” to you which is used to determine whether or not you can be considered more of an asset or liability. The lower your credit rating is, the more they see you as a liability; conversely, the higher it is, the more elevated the intrinsic value. Because these institutions are only interested in collecting interest payments, your credit rating reflects the maximum amount that lenders will be willing to provide loans for. Assuming that you want to improve this figure, consider the following…
Sign-up for a credit card
This has to be the oldest and most used way to restore bad credit scores. Using a credit card to make your monthly in-store and online purchases is great if you are able to pay down the balance on a monthly basis. For those who are very prudent and are not apt to let payments slip or ungodly amounts of interest accumulate, a credit card can help you quickly and painlessly raise that terrible score back up into a decent range. Again, you need to be extremely careful though as most cards carry with them higher interest rates and other inflexible policy details, so be sure above all else to not exceed beyond your limit to cover monthly surcharges.
Take another hard look at your credit report
Given that fact that you can get a copy of your credit report for free, it only makes sense that you should study it in great detail. There’s a very good reason for this – it might not contain accurate information. That’s right; the gatekeepers might be working with outdated or incomplete information which in turn, has drastically affected your credit score in a very negative manner. Any and all questions should be addressed to the proper credit bureau agents.
Getting rid of debt
Chances are, the reason your credit score looks like crap is because you’ve piled on too much debt. If this is the case, you should take steps to alleviate the issue by any and all means necessary. Some people like to go the route of frugality, essentially trimming down all their expenses across the board, while others take a more measured approach. You don’t have to torture yourself to get rid of debt though; while you’re saving you can also look for alternative investments and diversify your portfolio / career interests. Likewise, it might be prudent to take advantage of local business opportunities when they arise, especially if you know people with great ideas who are dedicated and trustworthy.