How Much Important Is Credit Score? 7 Ways to Improve It

The credit score and credit history are the vital parts of anyone’s financial life. The credit score and history follow the person forever playing a key role to manage tough financial situations. Some people think that their credit score matters only when they need a new credit card or loan but its importance is much more. As the borrowing trend in the UK has become very common because of financial difficulties being faced by common household, the importance of knowing all credit score and the ways to improve it has increased much.

Importance of Credit Score in Borrowing:

Whenever you apply for any type of loan, may it be an unemployed loan, payday loan, guaranteed personal loan, home improvement loan, short-term Christmas loan, start-up business loan or small business loan, credit score emerges as the top qualification parameter. Higher credit score is more likely to help you get better loan deal at a lower price and better terms and conditions. Although some direct loan stores in the UK advertise for offering no credit check loans they too consider credit score as the mirror image of your credibility; however, they take it as a circumstantial development beyond your personal control.

Each loan application for a no credit check loan states that the borrower has failed in repaying the previous debts as per agreed schedule; and, he/she needs more debt. In most cases, the regular banks or financial institutions reject the bad credit loan requests because of more than before stricter concerns to safeguard the credit as per new regulations. On the other side, all the direct lending agencies welcome the borrowers with poor credit score because these financial agencies see bad credit history as an opportunity to earn more.

Related: Credit Score below 560? Avail Bad Credit Loans Today despite No Guarantor

Growing Trend For Getting No Credit Check Guaranteed Loan:

The numerous reports confirm that the majority of British residents opt for the most convenient way to borrow with the intention to get the financial help instantly. They don’t want to share their financial worries with friends or relatives; otherwise taking short-term small amount loan from the community friends is also a good alternative of borrowing from private lending agencies. According to a study revealed in 2018, moreover 60% UK borrowers (70% women -51% men) accepted that they don’t know even the interest rate of their existing debts. The priority of borrowers is to get the required cash help instantly without involving any – guarantor or broker. To keep the privacy intact, British borrowers don’t mind in paying a little extra; the tendency keeps the ‘no guarantor no credit check guaranteed loan’ in high demand especially during the festive season around Christmas. Sensing this preference, numbers of online direct lenders offer no guarantor bad credit Christmas loans that transfer high risk to only them but they take it an opportunity to earn more. Wouldn’t be it good to improve your credit score through practical ways and to get a better loan deal?

Seven Ways To Improve Credit Score And Get Better Loan Deal:

The online direct lenders have an edge over the mainstream regular banks by providing guaranteed bad credit- no guarantor -loans. This loan module makes the borrower eligible even if he has a poor credit score and doesn’t have any guarantor or asset to pledge. The intensity of risk involved makes the loan cheaper or costlier; go through the following 7 smart ways to improve your credit score for low-cost borrowing:

1. Watch The Balances Of All Credit Cards:

Credit card balance and the usage nature are major factors deciding the credit score. Try to minimize the credit cards’ balances. If you hold multiple dues for numbers of credit cards, try to consolidate them with one debt. Almost all the leading lending agencies provide consolidating loan to help you improve credit score.

2. Pay More than the Minimum:

Paying more than the outstanding delivers multiple credit ranking benefits in addition to reducing the overall debt dues. Doing more substantial payment in one account while paying the minimum required amount at other accounts helps you reduce the balances and improve credit score. Once the one debt is paid, make the 2nd debt as your focused debt account to pay maximum.

3. Credit Utilization Ratio:

The credit utilization ratio is a key in credit score calculation. The credit utilization rate is assessed by dividing the total credit card balance by the available credit card limit. Develop the habit for not to use the maximum limit of credit cards. Lenders love to see low ratio up to 30%.

4. Check The Credit Report For Mistakes:

Even a minor mistake on the credit history file delivers serious impact on your credit score and the scope of getting a low-quality loan. Register on electoral roll with accuracy; it boosts your credibility for borrowing.

5. Build a Strong Credit history:

A long credit history helps you more to improve the credit ranking. A good credit history age is respected to be five years. The longer positive credit record means better credit score. Having no credit history is also not in your favour; the lenders like to see your repayment capabilities and discipline in online the time instalment payment.

6. Pay Bills On Time.

The best manageable way to improve the credit score is – pay all the monthly bills on the time. The payment history is reviewed regularly by credit card history bureaus to fix your credit score. The credit card history accounts 35 % to a credit report. Setting reminders to pay on the time is the best way to keep the payments on track without fail.

7. Don’t Let the Old Mistakes Harm Your Credit Score

If you see anything unfair harming your borrowing potential by denting the credit score, immediately contact credit bureau or concerned authority. The red marks on your credit history report didapper automatically after 5-6 years but you can get this advantage earlier also by requesting the concerned authorities.

Concluding Note:

Getting the best deal for any loan type depends upon your past performance in paying the dues. Even if you try to improve the credit report by applying the above-mentioned tricks, it will take time to show your financial performances better. Therefore, to develop the habit of paying all the dues on the time by not exceeding the expenses beyond the earning and repayment capability.

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