12 Mar How to Improve Your Credit Score
Trying to obtain a mobile phone when you have a bad credit score can be very difficult. Since many of these devices and plans are becoming more expensive all the time, most mobile carriers place a large emphasis on what your credit score is to determine if you are eligible for a contract. While there are alternatives out there in the mean time, the best long term solution would be to improve your credit score. This can take time, but if you start now, you should start to see your credit score rising before long.
First, you want to look at your current debt situation. If you owe a lot of money – whether it be on a credit card, a mortgage, or a personal loan – it will lower your credit rating. While paying debts back can be hard, you should try and make it a priority. Even spending just a little bit more each month on paying back a debt can make it go by a lot faster. If you have several debts, consider looking into a consolidation loan to try and get a lower interest rate and to make them easier to manage.
The second most important factor is your credit cards. One thing that credit reporting agencies look at is your debt to credit limit ratio. If you have several credit cards, and each one of them is maxed out, then you will most likely have a poor credit rating. This could also be the case if you only have one credit card, and you hardly use it. The key for maintaining good credit card practices is to try and spend between 30 and 70 percent of your credit limit, and to make sure that you always pay it off by the end of the billing period. Leaving a little bit on the card isn’t awful, and it may even help your credit score, so it’s not the end of the world if you can’t pay it off completely. Another factor that comes into play concerning your credit cards is how long you have had them. Good credit practices over a long period of time will help you out more than good credit practices over a short period of time. This is why it is a bad idea to close some of your older cards. Having older credit cards allows you to maintain the credit history attached to them, and will help you raise your credit rating.
Lastly, whether it is your credit card bill, your electric bill, or your mortgage payment, you want to make sure that you are paying it on time. Late payments, or even worse, missed payments, can dramatically alter your credit score. Set up automatic payments to help make sure that you don’t miss any, or set reminders for yourself on a calendar or on your mobile phone. Always see that your payments are budgeted for so that when the time comes you will have the money for them. If you can do this, you should have no trouble making your payments on time.
Improving your credit rating can take time, but it will be worth it in the long run. Get started as soon as you can so that you are able to get yourself that mobile phone contract you want sooner rather than later. Remember to have patience, and that this process won’t happen over night. Stay the course, and before long you should start to see your score increase.