Credit Scores can take a number of years to build up and a few months to destroy. We have all experienced some issues with our credit ranging from non-payment of Credit as at when due to utilizing all of your Credit. At times, things beyond our control such as medical expenses, bankruptcy and divorce can result in a bad credit score. Maintaining your credit should be intentional in order to produce effective results. You have to pay a higher rate on a low credit score, but on a high credit score you will pay less.
A credit score gives details of credit history, prompt payments etc. A bad credit score improves over time naturally, don’t stress over it but if you are in dire need of business funds in the nearest future. It would be best to try improving your credit score beforehand. It can be a determining factor in making your advance into the next credit tier.
Seriously speaking, there is no automatic method to increase your credit score by 100 points within a month. A lot of Credit repair experts make promises that are far-fetched, it’s simply impossible to raise your credit score by 100 points in a month. There are four tiers of credit which includes:
Tier 1 ( Excellent Credit ) : 700 and above
Tier 2 ( Good Credit): 660-699
Tier 3 ( Fair Credit ): 620-659
Tier 4 ( Poor Credit): 619 and below
Tier 1 and 2 get the best rates. The most difficult tier to get approval is tier 4. If you have a Tier 3 credit score, I’d advise you try and improve your score. It’s a crucial part of your business. If you’re starting a business without cash flow statement, it can be difficult to secure funds because, most Lenders will use your credit score to assess you. That’s why it’s important to improve your credit score when you can, so as to get approval.
These are the 4 best hacks you can use to improve your credit score:
Avoid negative marks – Sometimes, it is difficult to pay your bills but try as much as possible to pay your credit as at when due to avoid negative marks from Credit reporting bureau such as Transunion, Equifax, and Experian. Their reports are slightly different from one another.
Open A New Secured Credit Card –Businesses with a credit score of 800 and above can have 7 open credit cards, even if you don’t want to open more than 1 of them a year. It doesn’t matter how bad your credit score might be, you might still get approved for a secured credit card. Secured Credit Cards helps to rebuild your credit. You’ll deposit some money, before the lender gives you a line of credit.
Increase your Credit Limits – Contact your existing card companies and ask them to increase your limit. If you’re not at 100% credit utilization, it will be easy to get your limits raised. Even if it’s just a 10% raise, It’ll help your overall Credit report.
Become an Authorize User – You’ll require someone
who is in good credit standing. He or She will add you to their existing
credit card accounts. You’ll be given a card linked to the person’s
account. Members of your family and Close friends should be the people
you ask. It is difficult to convince someone to add you, but it is
advantageous as it can cause a boost in credit score up to 50 points.
Banking on your credit is crucial to getting the most out of your money. Hopefully, if you make use of these 4 hacks your credit score will improve. Most importantly, don’t overspend with your new increased credit limits and pay your bills as at when due. You can use the autopay feature to avoid late payments. Feel free to reach out to us and let us know if this has benefited you!