How to Raise your Bad Credit Score
Having a bad credit score can prevent you from doing many things including buying a home, a car and even a new cell phone. It can also prevent you from receiving any sort of financial assistance if you find yourself in an emergency situation. The higher your credit score is, the more lenders will trust you to pay them back. So how do you gain their trust? From paying back existing lines of credit on time, to getting an online personal loan for bad credit, let's jump into how to raise your bad credit score!
Pay any existing lines of credit on time
On-time payments are the main factor affecting your credit score. Missing just 1 payment can drop your score a great deal. Paying only the minimum amount is acceptable, while paying more than the minimum can decrease your overall balance faster. If you find yourself not being able to pay at least the minimum amount, contact your creditor to see if other arrangements can be made, at least until you're able to make payments again. The more on time payments that you make, the more your credit score will increase, it’s that simple!
Keep Credit Utilization Low
It is recommended to not go any higher than 30% of the limit on any of your credit cards. That comes as no surprise as credit utilization is the second biggest factor of determining your credit score, accounting for 1/3 of your overall score. The best way to lower your credit utilization is to pay off your credit card balances each month. If you're not able to pay off the entire balance of your credit card each month, consider making large payments when possible to bring down the overall balance. Getting an online personal loan for bad credit can also help to decrease your overall credit balance - more on that below.
Get a secured credit card
A secured credit card is a credit card that requires you to provide a cash security deposit to open an account. This deposit protects the lender from losing money if you don't pay back your balance. Think of it as paying to raise your credit score. Secured credit cards are a good option for rebuilding your credit, as long as you keep the overall balance low and make your payments on time every month. Since payments are included in your credit report, paying on time and managing your balance will help improve your credit score over time. After increasing your credit score, you may be able to qualify for a non-secured credit card and other lines of credit.
Get an online personal loan for bad credit
Getting an online personal loan for bad credit can help to increase your credit score by improving your credit mix. Your credit mix is made up of the different types of credit accounts you have, which includes: credit cards, loans, mortgages, etc., and it makes up roughly 10% of your credit score. The most beneficial way to use an online personal loan for bad credit is to use the funds from the loan to pay down your other lines of credit. An online personal loan for bad credit can also be useful when you need emergency funds for things like medical bills, car repair financing, home repairs, etc. Making your loan payments on time each month will also contribute to your on time payments, which will increase your credit score. When looking for online personal loans for bad credit, keep 60monthloans.com in mind as we offer personal loans for bad credit and loans with no credit check!