Whilst people are depending more on credit to make purchases and financial investments, knowing how to maintain a healthy credit score is vital.
What is a healthy credit score?
Credit scores are financial tools that determine whether you will get loans, the interest rates you pay and so much more. Today, credit scores have become such a crucial part of our financial lives and therefore maintaining a healthy credit score is very important. There are different ‘credit checking bureaus’ that have different ways of determining your credit scores. The most common credit score range is between 300-850.
How to maintain a healthy credit score?
The most crucial way to maintain a healthy credit score is to be consistent with good credit habits.
Here are 5 tips to maintain a good and healthy credit score :
Limit your credit applications – Applying for credit at frequent intervals can make lenders think that you depend highly on credit and are therefore at a higher risk to fall into debt. Although lenders’ criteria might vary, a good rule of thumb is to apply for credit not more than once in three months.
Avoid Defaulted Accounts – You are risk of a defaulted account when you have missed several expected payments and your relationship with the company has broken down. This is a major red flag and can have a significant impact on your credit score.
Only borrow what you can afford – Getting into trouble with debt may lead to things like County Court Judgements (CCJ), an Individual Voluntary Agreements (IVA) or even bankruptcy. Troubles with debt can show up on your credit report for at least six years and will cause a negative impact on your credit score.
Be aware of fraudsters – Look out for signs of any fraudulent activity in your credit report, as any signs of fraudulent activity can cause a negative impact on your score. If you see a significant increase in the amount you owe, or any applications that you are not familiar with, you may be a fraud victim. Note that if you do become a victim of fraud, your lenders should fix any damage to your credit report as soon as possible.
Pay your bills on time – It is very important to pay your bills on time, as payment history is one of the most crucial factors in calculating your credit score. Missed and late payments can stay on your credit report for up to seven years.
Start-Up Loans offer you a fixed interest rate of 6.19% APR, so your interest will not change based on your credit score, it is important to maintain a healthy credit score to receive a personal loan.
If you need business advice or guidance on how you can make sure you have a healthy credit score before applying for a Start Up Loan, contact the team today through the website – Loans – Business In Focus
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