How to Get a Better Credit Score
If you want to get a better credit score, you need to work on reducing your debt. You should work on paying off as much of the debt as you can, whether you have a low-interest rate or higher interest rate on specific cards and loans. When you carry a balance on multiple credit cards, you could have a hard time receiving approval for a personal loan that you might need in the future. It might be harder for you to get approved for any additional credit cards, too.
Attempt to Consolidate
You may have several credit cards that you use on different occasions. While you may have thought it was a good idea to use a different card for different purchases, you now have balances on several credit cards at once and it is not always easy to keep up with all the debt you owe. It is better to pay off one small balance before using a different credit card for another purchase. Your score will only continue to drop as you continue to have a balance on several credit cards without paying that balance off in full.
You could ask the credit card company to transfer the balance of your card to a different credit card as a way to consolidate the debt you owe. If you decide to make this move, you would only need to make one monthly payment because all the debt would go to that one specific card. It is a great solution for forgetful people who might lose track of all the payments they owe to different credit card companies.
Pay Your Monthly Bill on Time
Know when you need to pay your bill and make sure it gets paid by the due date. Making late payments is going to cause your credit score to drop. Even if you can only afford the minimum monthly payment, it is better to pay the minimum than to skip the payment altogether. If you have a hard time remembering when these payments are due, you can always put in a request to receive electronic bills that get sent directly to your inbox. There are even apps available that you can download and use to keep track of due dates.
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Avoid Maxing Out Your Credit Cards
While you might have a limit of $1000 or more on a credit card, that does not mean you should spend the entire amount that is available to you. Having a larger balance could make it difficult for you to pay everything that you owe within a reasonable amount of time. You should try to spend 30 percent or less of the amount that is available to you on each credit card. Keep the balance low and do not max out any of your cards. Those with good credit typically use less than 10 percent of the available credit.
Review Your Credit Report
Go online to look at your full credit report to see what is on there. Different errors can appear that could knock your score down by several points. You are entitled to free credit reports that come from the three major credit reporting agencies – Experian, Equifax, and TransUnion. Search for any possible mistakes that are on your report and then dispute those mistakes. Even if takes a bit of time to have those errors removed, your score will improve when those errors are no longer on your credit report.
Do Not Keep Applying for Credit
If you already have several credit cards, it is not the best idea to keep applying for more credit cards. You could end up getting into major debt but filling out more applications could cause your score to drop, even if you get denied for those cards. The reason your score will drop is that credit card applications lead to a hard inquiry that appears on the credit report. If you do not really need another card, do not apply for one.
Sign Up for Credit Monitoring
When you want to know what is going on with your credit, you can sign up for credit monitoring with one of the free companies, such as Credit Sesame. The company will let you know when your score drops or increased, along with providing you with other valuable information.