Starting From Low Credit: 4 Tips And Tricks To Increase Your Credit Score

Every business needs money to operate. They use it to buy products, pay workers, settle rents, and other operational costs. However, any business experiencing financial challenges can always turn to banks and other financial institutions for funding. But such a business might fail to secure any funding from lenders due to low credit score. 

A low credit score can have major consequences than you ever thought.  For instance, if it doesn’t limit your borrowing capacity, most financial institutions will guarantee you a loan at a very high interest rate. 

Apart from that, you might be forced to pay high premiums on your insurance policies. Besides, most landlords consider you as a risk to them. Therefore, you might find it harder to rent a store for your business. That’s why you need to build your credit score from the start. 

If you want to build your credit score and increase your chances of securing a loan, you can visit  https://digitalhoney.money/best-credit-builder-loans/ or other similar sites.  

What Is A Credit Score? 

A credit score is a three-digit number, usually from 300-850, representing your creditworthiness. In other words, it shows the likelihood that you’ll repay your loan and other bills on time. 

A credit score of 300 is considered poor, and if you’ve got such a score, you might not get loans from any financial lending institution. On the other hand, a credit score of 850 is considered excellent. Such a score is likely to guarantee you a loan at a very low interest rate. 

Credit scores can be determined using various factors. These include your loan and other bills repayment history, the number of debt lenders you owe, your credit history length, and other relevant factors. For more information on how you can build a strong credit score, you can work with CreditStrong.com and other similar firms.  

How Can You Increase Your Credit Score?

As earlier noted, a low credit score can cause you not to get funds from any financial lending institution. For that reason, you might want to build and increase your chances.  

Here are some simple yet effective strategies to boost your credit score. 

• Repay Your Loans And Bills On Time 

If you’re looking to boost your credit score within the next few days, then you must settle your loan repayment and other bills on time. This is because late loan repayment is one of the major causes of a poor credit score.  

Although sometimes it can be hard to remember the due dates for your loan repayments, you can overcome this by setting up payment reminders. This involves marking your calendar or setting on your electronic gadgets to remind you when the loan repayment date falls due. Setting a reminder ensures you don’t miss any loan due dates, thus boosting your credit score.  

• Consolidate Your Debts

Opening several credit cards can have a huge impact on your credit score. When you’ve got too many credit cards, whether utilized or not, you’re most likely to appear risky to lenders. 

Besides, having too many credit cards can cause you to spend more money than actually what you can afford to repay. This makes you start delaying your loan repayments, thus lowering your credit score. But you can avoid this by limiting the number of your credit cards or consolidating your debts.

Consolidating debts is the practice of combining two or more loans into one. This ensures you only have one loan repayment to deal with. Besides, it also limits the amount of money you can spend daily. For that reason, you might be able to repay your loan faster, thus improving your credit score. 

• Report Any Credit Report Error

Sometimes you can have a poor credit score because of inaccurate credit reports. For instance, you can make loan repayments on time, but your lenders fail to update their books. If that happens, your credit score is likely to go down. 

That’s why you always need to dispute any credit report error to settle discrepancies. Reporting enables the relevant credit rating authority body to intervene before your credit score gets affected.    

• Keep In Touch With Your Creditors

Lastly, you might want to keep in touch with your creditors. This involves contacting them whenever you miss your due date on your loan. 

Besides, if you not to can’t repay your monthly installment due to economic downtimes that affect your finances, you can arrange with your lenders for a new repayment plan. This helps eliminate the effect of late loan payments, which can influence your credit score. 

Takeaway

If you want to increase your chances of securing loans from lenders, you must improve your score. Some of the strategies to help boost your credit score include repaying your loans on time, consolidating your debts, reporting any credit report error, and keeping in touch with your creditors.