7 Proven Steps to Improve Your Chances of Getting Credit
12:21 01 November 2022
If you're like most people, you want to be able to purchase the things you need and want without having to worry about whether you'll be approved for credit. Unfortunately, if your credit history is less than perfect, getting approved for new credit cards or loans can be difficult. In this blog post, we will discuss five steps that will help improve your chances of getting the credit!
1. Check Your Credit Score And Credit Report Regularly
Your credit score and credit report are two important pieces of your financial puzzle. Check them both regularly to ensure no errors or negative information are dragging down your score. If there are any errors, ensure that you have them corrected as soon as possible. Some loan matching services, such as creditclock.net, don't pay much attention to your credit score.
2. Make Sure You're Paying All Your Bills On Time
One of the best ways to improve your credit score is to make sure you're paying all your bills on time. That includes credit card bills and other types of auto loans or mortgages.
If you have a history of paying your bills late or if you have any outstanding balances, your credit score will suffer. So it's important to ensure you're always updated on your payments.
3. Keep A Low Balance On Your Credit Cards
One of the key factors that credit scoring models take into account is your credit utilization ratio. This is the amount of credit you use relative to your credit limit. For example, if you have a $1,000 credit limit and a balance of $500, your credit utilization ratio is 50%.
Ideally, you want to keep your credit utilization ratio below 30%. The lower it is, the better. A lower credit utilization ratio indicates to lenders that you're a responsible borrower who doesn't max out your credit cards.
4. Don't Open Too Many New Accounts At Once
Opening too many new accounts quickly can lower your credit score, so if you're planning on applying for new credit, space out your applications. In addition, don't close old accounts, even if you don't use them. Keeping your credit history "clean" by closing old accounts can have the opposite effect of what you're hoping for.
5. Limit Your Inquiries Into Your Credit History
One of the things that can hurt your credit score is having too many inquiries into your credit history. When you apply for a new credit card or loan, the lender will usually check your credit score as part of their approval process. Each time this happens, it is recorded as an inquiry on your credit report.
Having too many inquiries on your report can make you look like a higher risk to lenders and lead to your credit score being lowered. That's why it's important to only apply for new credit when needed.
6. Try To Get A Cosigner If You Need One
If you're having trouble qualifying for a loan on your own, you might want to try to get a co-signer. A cosigner is somebody who agrees to be responsible for repaying the loan if you can't. The cosigner doesn't have to provide any money for the loan; they agree to be responsible for it. This can help you qualify for a loan you wouldn't be able to get on your own.
To get a cosigner, you'll need to find somebody who trusts you and is willing to take on the responsibility. This is usually a close friend or family member. Once you have a cosigner, you'll need to make sure you make all your payments on time. If you don't, it will reflect poorly on you and the cosigner.
7. Don't Close Old Account
You should keep your old accounts open because it shows lenders that you have a history of responsible credit management. Lenders like to see that you have a long history of managing credit responsibly, and closing old accounts can make it look like you're trying to hide something.
Be Patient - Good Credit Takes Time To Build
Patience is one of the most important things to remember when trying to improve your credit score. It takes time to build good credit, and there is no magic bullet that will instantly boost your score. However, by following the steps outlined above and remaining patient, you can improve your credit score over time and make it easier to get the credit you need.
If you're having trouble getting approved for credit, consider applying for a secured credit card. A secured credit card is a great way to build your credit history and improve your credit score, as long as you make your payments on time and in full each month.