Strong credit scores are more than just a matter of pride. They can also make borrowing more accessible and more affordable for you. For instance, if you want to buy a house, a high credit score could help you qualify for a mortgage.
You may be able to secure a great credit card deal if you have a good credit score. So, if your goal is to improve your credit score this year, continue reading to build your credit score in 2022.
Credit Scores: Why Are They Important?
With good or excellent credit, most people can save hundreds of thousands of dollars throughout their lifetime. If you have good credit, you’ll get better rates on mortgages, auto loans, and other forms of financing. Credit-worthy individuals are considered lower-risk borrowers, and more banks compete for their business and offer better rates, fees, and perks.
On the other hand, people with bad credit ratings are considered higher-risk borrowers. Therefore, fewer lenders compete for them, and more businesses charge high-interest rates (APRs).
There are several simple things you can do to improve your credit score. However, you’ll need to put in some work and wait for your score to improve. Listed below are a few easy steps to improve your credit score.
Always Pay Your Bills Promptly
Your payment history weighs more heavily than any other factor when calculating your credit score. Paying your bills on time could have a significant impact on your credit score. Even if you only pay your minimums on your credit card, you will be on time. However, it’s still advisable to pay off your entire balance every month if you can.
Get Rid Of Credit Card Debt
Your credit utilization ratio is another important factor that determines your credit score. It reflects how much of your total credit limit is on each of your cards. Having a ratio above 30% could hurt your credit score, so paying it off could improve your score if you are carrying a lot of credit card debt.
Don’t Close Long-Standing Credit Cards
Another factor considered when determining your credit score is the length of your credit history. There’s a chance that you may want to close any account you haven’t used for a while. If that account has been open for a long time, you shouldn’t close it unless, of course, you pay an annual fee. Keeping older accounts open could benefit you in the long run.
Identify and Correct Any Errors
Check your name, present and previous addresses, and look for unfamiliar accounts that may indicate identity theft. If you see errors or charges you don’t recognize, contact the credit bureau reporting the error or investigate it.
Our mission at Okinus Credit Solutions is to empower our customers by helping them to build credit back up as they buy the products they need. To learn more about our lease-purchase program, feel free to complete our application online or reach us at 844-450-0221 for more information.