Top Ways You Can Get A Better Credit Rating

From a business perspective credit ratings make a lot of sense. For banks and lenders these scores give the companies involved the chance to review the investment potential of an individual borrower and to decide whether or not they represent a reliable place to grow their cash – almost like looking at the previous performance of a stock when deciding if you want to buy shares in that business.

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However in some other ways credit ratings don’t make much sense, and for the customers trying to find a loan they can seem counter-intuitive and even cruel in some ways. The problem here is that due to the way credit ratings work, it’s the very people who need loans the most that struggle to get them; it works out so that the poorest people end up paying the highest rates or even unable to get financial aid at all.

Of course this can make life very hard but the good news is that there are a number of ways around this problem and a number of techniques that anyone can use to actually improve their credit rating and so make themselves a more attractive prospect for lenders. Here we will look at some of those methods.

Taking Out an Easy Loan

Taking out a loan might seem like the wrong thing to do when your credit rating is bad, but actually it’s the best way to improve your score as it will give you the chance to prove that you’re reliable and that you’re capable of paying back the money.

In other words, you should take out a loan but you have to make absolutely sure that you’ll be able to pay it back quickly and efficiently if you want to make your score better rather than worse. Of course this will also have to be a small loan seeing as the whole point is that you’re struggling to take out loans. The kinds of loans you’ll be able to use for this purpose for instance are credit card loans (just make sure to make your repayments each month) and small guaranteed loans. Over time if you manage to pay these back, you’ll be able to prove to the banks that you are reliable with money and in a better state to pay off larger loans.

Be Active With your Cash

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You can also improve your credit rating by being otherwise a good banker – which means using your money in the way they want you too – using the account regularly but keeping the balance high at all times.

Paying various bills can also help to improve your rating as long as you never let these bounce, and particularly useful to this end is a mobile contract. Anywhere you show you’re able to stick to financial commitments, you’ll be able to improve your reputation in the eyes of the banks and lenders.

Remove People From Your Credit Rating

Getting a credit report is a good idea if you’re planning on taking out any kind of loan soon as this can help you to see things that might be bringing you down. For instance, if you have once lived with someone else or shared an account you may find that your credit scores are connected – and this could drag yours down. In such instances, requesting to have that person removed from your history can help to improve your standing almost immediately.

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