Most credit scores fall somewhere between 600 and 750, from a range of 300 to 850. However, if you want to be in the top 20% of people, you’ll want a score of 780+. This is generally considered exceptional and means you will have no problem acquiring a loan with the best terms and lowest interest rates. This means that if you are looking to invest or expand your business, you’ll have access to the cash which can allow you to do so. But how to improve your credit score?
Check Your Credit Report
This is an important and often overlooked step. It isn’t enough to simply know your score. You need to determine how that score was arrived at by following the calculations. It is possible that some data has been inputted incorrectly. So, it’s better to check for any payments incorrectly marked as late. Once you have combed through and mended any errors, your credit score may have already increased. If you’re lucky, you’ll see an immediate improvement.
Keep an Eye on Payments
If you have many different debts, it can be easy to miss payments purely because of human error. You may have the cash available, but forget to pay it on time. Set up standing orders, direct debits, and payment reminders so that you never miss a payment. By tracking your debts carefully and ensuring you have the money available when you need it, you have a better chance of moving from a good credit rating into an exceptional one.
Reduce Your Debt
Not always the easiest, but usually possible. By consolidating your debts into one payment, you can often end up with a lower interest rate. This will help you to pay it off faster, increasing your credit score substantially. You may even be able to make repayments ahead of schedule. It also means that you avoid the previous problem of missing payments.
Achieving an exceptional credit score is an admirable achievement that many miss out on. However, the benefits of being able to easily and quickly secure a low-interest loan mean that the above steps are well worth the effort. Check your report for mistakes, keep up to date with payments, and pay any outstanding debts as soon as possible, by combining them into one monthly payment.