Three Ways to Improve Your Credit Score
One of life’s cruelties is that it takes a lot of work to build a credit score, but doesn't take much to lower one. If you’re struggling financially, some of those struggles may have a lot to do with your credit score. Here are a few things that you can do to give your score a boost.
1. Keep Your Unused Credit Cards
When you want to improve your credit score, it’s good to have a high credit limit, even if you don't use all of it. That’s because part of your credit score involves your credit limit to debt ratio. The lower your debt is compared to your limit, the more points your score will gain.
To keep your ratio high, don’t close any of your unused credit cards. The more credit cards you have, the higher your overall limit, and the better your credit score.
2. Be Strategic With New Credit Cards
However, if you already have a credit card and you’re more or less happy with that card, don’t open any new cards just to improve your score. This strategy only helps when it comes to cards that you already have. Opening a new credit card requires a hard credit inquiry, and those inquiries can lower your overall score.
3. If You Do Need a Credit Card or Loan, Use the Right Source
Now, what if you do need a new credit card or even a term loan? The good news is that having a credit card and using it regularly -- as long as you’re paying it off -- can boost your credit score over time. The same applies to having a term loan.
But don’t settle for just any credit card or term loan. We recommend getting these items from small community banks or credit unions. These institutions tend to look at the big picture instead of just looking at your credit score. As a result, you may get a higher credit limit from them.
When it comes to term loans, credit unions and community banks have better interest rates, which can help you ensure that you pay back your loan on time. Since missed payments can harm your credit score, this is an important factor to consider.
If you're struggling to find the best options, let Bundlefi help. We can assist in your search for small banks and credit unions that can help you find what you need. Bundlefi connects people to small, personalized financial institutions instead of big, impersonal banks. Take a look at Bundlefi today to get started.