The longer you stay at your job, the more points your credit rating gets. You have a stable job, which means that you are a reliable and less risky consumer.
The credit rating varies between 300 (lowest) and 900 points (best result). 650 is a magical average - anything above 650 will likely help you qualify for a standard interest rate. A rating below 650 points, meanwhile, will add to your difficulty in obtaining new money loans.
When examining your credit dossier, lenders may see slightly different numbers than you. This is because each lender applies special rules regarding risk by adding and subtracting points for various reasons and preferences. As a result, the own methods for calculating the rating will lead to differences in the final figures. The points that you will see when requesting your credit dossier are calculated using an algorithm created specifically for consumers. It shows an approximate averaged version of various formulas, and it remains in the same range of numerical values with a lender rating.
It is recommended to request your credit dossier at least once a year, absolutely free of charge (upon request by mail, fax, phone or in-person). Also, if you wish, you can pay to see your credit rating.
Credit bureaus assign certain points for those who have a mortgage or who rent housing, and also takes points in the absence of information about housing. As soon as you repay your mortgage, this account is deleted from your file, and you again find yourself in the category of unknowns, which reduces your credit rating! In the meantime, the history of credit cards and other credit accounts will remain in your dossier even after repayment and closing. But the repaid mortgage loan, unfortunately, will not improve your rating. Imagine: you have your real estate, and this does not play into the hands of your credit rating - does that make sense? Besides, not all mortgages are transmitted by the credit bureau.
Try to apply for a loan only in case of an urgent need for a new account. Too many inquiries in a short period can sometimes be seen as a sign that you open many credit accounts because of financial difficulties or incur more debts than you can repay. Numerous requests will make most lenders wonder about the true reason for this behavior. ”
Pay all your bills on time. A delay in payment or the transfer of your account to collection agencies harms your credit rating.
The extent and frequency of negative credit information, including bankruptcies, bad debts, and collector intervention.
Avoid excessive requests and statements. When a lender or business owner checks your credit history, this leads to an extremely rigorous study of the credit dossier. Apply for a new loan at a moderate pace
When you have a high balance that runs from one credit account to another, it means that you are experiencing financial difficulties and present a big risk.
How to Increase Your Credit Rating?
- Correct errors and track your data for future errors. Request your credit dossier from each bureau at least once a year.
- Cut your balance. If your debt level exceeds 50% of your available limit, develop a payment plan to reduce the rate.
- The main advice for improving the credit rating: constantly use loans and pay them all on time. Set automatic payments to simplify the task.
- If you do not have a credit history or you need to re-form your loan, apply for an insured credit card. You make a deposit that sets a limit on your card, and then use it like a regular credit card. The financial institution that issued this card to you will provide information about your payments to credit bureaus. This way you can earn points. Choose from the available Home Trust Secured VISA options.
- Reread our list, examine your credit dossier and identify all areas that can be improved to increase your credit rating.
Remember, your credit rating is not a reflection of your value - it is just a credit instrument. The good news is that your credit rating is similar to self-esteem. Sometimes it will be high in your life, and sometimes low, but you can always change it!