Adulting in the 21st century is immensely hard, and it has left all of us juggling between different problems, headaches, and essential matters. Similarly, your credit score is an elephant in the room.
Attaining the perfect credit rating is the dream of every individual and we can assure you can achieve them by following these simple steps.
Some Simple Steps
- The first step is to pay your loans on time. The best way to remember is to set up automatic payments or set a reminder.
- Try to keep your usage below the credit limit. The model used for credit score looks at the percentage of credit limit achieved. A lower percentage will improve your score. Experts advise keeping it under 30% of the limit. You should also avoid shifting the burden on a single credit card because it will increase the chances of maxing out on the limit.
- Longer credit history will also help you because it will show your credit experience. For how long you have paid the loans back on time. Helping creditors increase your credit rating.
- Apply for credit when necessary, too many requests for credit can increase skepticism about your economic situation and this can negatively affect your credit score.
- Always check your credit reports because if some error occurs you can file a dispute and get the credit points back.
Benefits Of A Perfect Credit Score:
Lower Interest Rates
A perfect credit score can help you get lower interest rates. The lowered interest rates are offered because of your reputation for timely payment of loans and credit. Lower interest rates can help boost the repayment of loans and increase your savings.
Credit Card And Loan Approval
The approval of credit cards and loans is dependent on your credit history. It would not guarantee a 100% chance of approval but it increases your chances. The bank or lender will also consider other factors such as your income and debt. Borrowers with bad credit will have a higher chance of rejection.
More Negotiating Power And Higher Limits
A perfect credit score provides you with leverage when negotiating the interest rates. The ball is in your court because they do not want to lose a client with such a good credit history. Similarly, you can get higher limits approved for your credit card. Your history of paying back previous amounts helps you gain the confidence of the bank. You can get a loan approved with bad credit but the limit will be lower.
Approval For Rental Property
The use of credit history to screen tenants is becoming common. An eviction or outstanding rental amount can have a negative effect and you might not be able to get the house or apartment.
Lower Car Insurance Premium
Your credit score is like your shadow; it follows you almost everywhere and auto insurance companies are no exception. They will offer you a lower premium amount on your insurance policy if you have a good credit score.
No security deposits
With a good credit score, you can get mobile phone contracts without paying the security deposit. You will also not need a security deposit for utilities for a rental property. It can become difficult to transfer these deposits when relocating.