It is important to build your credit rating as this will affect your ability to access services and products like loans and credit cards. You can always check your credit score at absolutely no cost. When you find that it is in bad shape, there are a few tips that you can use for fixing credit score fast.
Credit score definition
The credit score is mostly gotten from the information that is usually held in the credit report, also referred to as your credit line. The number on the credit score can differ between different lenders and even between different products from the same lender. The information that will be held on the credit file and the credit application form can be used to determine whether:
- They should lend you money
- The amount you should be allowed to borrow
- The amount of interest that you will be charged
The key information that will be on your file will have the greatest impact as lenders are mostly interested in your current financial information. However, whether we make good or bad financial decisions, these will be visible in our records for the next 6 years. In case your credit reports indicate a few payments that you missed, you may end up getting charged a higher rate of interest by the lender or you might even not be eligible for certain loans. This is due to the fact that lenders believe they will be taking a higher risk by lending money to you.
Your credit history will also impact your ability to get services such as insurance or even start a mobile phone contract. By regularly checking the report, it will be possible for you to spot any mistakes or even fraudulent activity on the report.
Information contained on the credit score
Each of the 3 agencies holds some information that might be slightly different about you. Therefore, you will need to check all the three agencies to have a more accurate picture of your credit status. Some of the details that will be noted in your file can include:
- The name, address, and date of birth.
- If there are any financial footprints on the file like the credit applications.
- Financial links to the other people. For instance, the bank account or joint loan.
- Any missed or late payments/defaults.
- The amount of money that is owed to a lender.
How long should it take to improve my credit score?
Generally, you will need to build a credit history over time. This improves as you increase the number of payments that you will b e making timely. The longer the time your bills will remain unpaid, the greater the impact that will be on your credit score. You can closely look at the credit score to determine if there will be any issues. There are several tips that can help improve your credit score and rating.
- Check for mistakes in your file. Even if there’s a wrong address indicated on your file, this can negatively impact your score. Therefore, you will need to check the details, and report any incorrect information you find immediately.
- Pay bills first. When you pay your bills on time, this can prove to the lender that you can manage finances in a more effective way.
- Confirm if you are linked to another person. If your friend, family member, or spouse’s credit rating is linked to yours because you have a joint account, this can have a negative impact on your personal rating if those people have a poor score or vice versa.
Use these tips for fixing credit score fast.