If you've ever been declined for a personal loan, home loan, business loan, or even a credit card because of your credit score, then this article is just for you as you will learn little-known way to improve it.
Your credit score is the cornerstone of a great lifestyle, or a dreadful lifestyle filled with huge minimum payments, high interest rates, and a pile of bills that you're barely paying off every month.
With a good credit score, you can lay rest assured that you will have a good chance of landing the loan that you just applied for. And a good score is important, because you're asking someone to lend you some money - and they've never met you before in their life.
How would you feel if a childhood friend sent you an email requesting money of a substantial amount, and you haven't spoken to them in over 15 years? How would you ever know if they would be able to pay you back in full? How would you know if you would ever hear from them again? Would it be too much to ask your friend for a recent copy of their credit report?
As weird as this may seem, you should consider this scenario when applying for a loan or card with a bank. They've never met you before, never heard of you before, don't know who you are as a person - and you want them to give you a loan for $20,000? Really?
With this in mind, if you've recently been declined for a loan, credit card, job, or apartment, then the factors above played a part in their decision. Nobody knows if you will really pay them back on time, so this is why your credit score is so very important.
So your 3-digit credit score is the only number that creditors have to make a rational decision about you. It means everything. It means that you will get favored in terms of chances of getting the loan. It means that you're reliable. It means that you'll get favored in terms of getting the job and apartment that you want. It says a lot about you.
But a low credit score says the opposite - even if you're a good person. If you happen to get approved for a loan or card, expect to see a high interest rate combined with a lower credit limit than desired. And this is only fair as banks and lenders have no idea if you will make your payments on time. All they have at their disposal is your credit report and the habit of how you pay your bills on time.
If you have a bad or low score, now is the time to fix it. You want to do it as soon as possible so you can have room to breathe each month, along with the satisfaction in knowing that your bills are being paid on time. Here are some great ways to start improving your credit score now:
1) If you're tight on funds and have a lot of cards that are maxed out, the last thing you want to do is apply for more cards. All of these inquiries can only do damage to your credit score - combined with the fact that you will more than likely be denied for credit.
2) Be sure to start paying your bills on time. Do whatever you have to do to make this your number 1 priority. If you have to stop eating out or cooking expensive meals at home, then do so. It will be more than worth it if you can start paying on time.
3) If you have a credit card or line of credit that you don't use, then do not close it out. The longer your credit history the better, and the longer you're in good terms with a particular creditor, the more likely they are to approve you of a loan or card in the future.
4) Do not open a lot of credit accounts thinking that you will increase your score as a result of it. This ineffective and non-logical technique will backfire on you and will lead to the lowering of your score - not to mention another bill to manage.
Following these simple tips will be the beginning of a new way of living, and a new way of handling your finances. With a higher credit score, you will be perceived in a better light than what was previously thought of you.
With bills paid off and accounts in good standing, the end result will be more disposable income in your pocket, and a stress-free lifestyle that will only make you happier in life.
Good luck with improving your credit score!
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