Many people do not have good credit. This is caused by late payments and outstanding bills. Not having any credit history can be just as damaging as bad credit. It is important to take control of your credit, and try to make it better. Short term loans can play an important role in your credit.
Keep Current Debts Paid On Time
PAY (Photo credit: tind)
The first step in improving credit is keeping current debts paid on time. Mortgages and car payments should be paid on or before the due date. The more times you go past the date, the worse it looks on your credit. Making certain these payments are always on time can be very beneficial to your credit score. If issues arise, this can make it difficult to keep these payments on time. A cash loan can help with this. The loan can ensure your payments are on time, and will help to improve your credit.
Keep Utilities Paid
Keeping your utilities paid on time can also be beneficial. These companies usually do not report to the credit bureaus for good payments. However, they can make reports if you get behind. These reports for non payment can be very damaging to your credit report. By paying your utilities on time, you also save money. Utility companies charge late fees for payments paid after the due date. They also can charge large fees for shutting off and reconnecting services. These costs can add up to a lot of money. This can make it difficult to keep up with other bills. This can begin a cycle of late payments and bad marks on your credit history.
Keep Bank Account in Good Standing
Another important factor, to keeping your credit score from dropping, is your bank account. Keeping your bank account in good standing can be very beneficial to your credit. Although, the bank does not usually report regularly to credit agencies, multiple overdrafts can be seen. This makes it very important to always have enough money in your account to cover bills. If a bill comes in without the proper funds to cover it, this can create a dangerous cycle. The payment will bounce. The utility will not get paid. This can cause the late fees and re-connection fees. Your bank will then charge you Overdraft-Fees. These fees can be quite high and can cause other payments to not go through. Some banks can also charge fees for having a negative balance on your account. Sometimes these are fees applied for each day the account is overdrawn. This can quickly become an overwhelming amount. This all can reflect poorly on your credit report, as well.
Short term loans can assist with this problem. You can get the money you need to cover all bills. The money can be paid back by your next pay. This can help to prevent many late charges and overdrawn bank accounts. These loans can be offered even if you do not have great credit. The loans for bad credit may not directly report to your credit. However, they can prevent a lot of negative credit marks. The less negative marks you have on your credit, the better the score will be.
Raising Your Score
Credit Rating (Photo credit: Match Financial)
Once you have minimized the possibilities of bad marks on your credit, you can proceed with steps to Raise your Credit Score. There are many simple things you can do to increase your score. A small credit line can be a big benefit to your credit. Store credit can be a great way to start building your score. Many stores offer their own financed credit card. They are usually small limits, but, give you something to work with. Secured credit cards are another option. All credit is paid for up front and reports to the credit bureau. Both options are available to those with lower credit scores.
Don’t Over Extend
Do not over extend yourself. If you cannot afford something, do not buy it. Just because the credit is there, doesn’t mean you have to use it. You are building your credit for better options. Keeping your credit line at the maximum or over can also reflect poorly on your score. Stay within your means.
Don’t Over Apply
Do not continuously apply for credit. Each time there is an inquiry on your credit, it leaves a mark. Many inquiries can look very bad and decrease your credit score. It is important to only apply for what you need.
If you stick to these things, it won’t be long until your credit begins to raise. On time payments and no additional negative marks can increase your credit score quickly. Before long, you will have the credit you need to get anywhere you want to be.